Flood Insurance

In the event of property loss or damage, flood insurance enables financial support to the policyholder in dealing with the consequences of flooding. Location is the biggest determining factor for the cost associated with this kind of policy coverage. In determining risk, insurance companies use topographical maps and historical data to pinpoint areas that are prone to flooding.
Many homeowners are under the false impression that they don’t need flood insurance. Many will simply assume their traditional home insurance has flooding coverage built in. They would be wrong, and, potentially, dangerously so. Flood insurance is separate and stands alone in what it covers.
Astonishingly, fewer than 20% of homeowners who live in areas at risk for flooding actually own flood insurance. This could very well be attributed to ignorance of the fact that they need separate flood coverage in addition to their regular homeowner policy.
A traditional home insurance policy is a reasonably profitable part of the business for insurance companies, as so many own homes and all are required by lenders to have coverage. It is simply a numbers game in which large numbers of policyholders each are charged smaller amounts for premiums. This is not, however, true with flood insurance. In fact the number of people making claims actually exceeds the number of people who need flood protection. As a result, insurance companies don’t have expectations of making a significant profit in selling flood damage coverage. Finding coverage providers may be difficult. However, it is important to note that in certain areas of the United States prone to floods, the federal government now mandates flood damage insurance. Talk to your insurance professional for more information.
In conclusion, people who have home mortgages in areas of possible flooding should certainly buy a flood insurance policy and should be aware that it is an entirely separate policy from normal homeowners insurance. And always, when considering a company, be sure it is a National Flood Insurance Program distributor.