Everything You Need to Know About Flood Insurance
Read Time: 4 minutes
- Most typical home insurance policies do not include coverage for flooding of any kind, and this includes from tropical storms and hurricanes.
- If there is even a remote possibility of flooding in your area, it may make financial sense to purchase flood insurance as a precaution.
- A flood insurance claim may pay for repairs as needed up to your coverage amount, including electrical work, foundation or wall damage and repair, cabinetry replacement, flooring installation and more.
- FEMA has created flood zones across the country, which can give you more information about the flood risk for your property.
- While mortgage lenders may require you to purchase flood insurance if your home is in a high-risk area, the coverage is usually optional for moderate and low-risk areas.
As you prepare to buy a new home in South Louisiana, you may have plans to enjoy living happily in your home for many years or even decades. Setting up a home insurance policy is an important part of the real estate purchase process, and you may assume that your coverage would fully cover any type of loss that you may incur as a homeowner.
The unfortunate reality, however, is that many local residents have had the stressful experience of losing their homes without having adequate coverage in place to repair or replace the home. This is why it’s critical to have flood insurance.
Why You May Need Flood Insurance
If you have not read your home insurance policy closely, you may assume that flood damage from a hurricane is completely covered, but this is not the case. Most typical home insurance policies do not include coverage for flooding of any kind, and this includes from tropical storms and hurricanes. Therefore, you could have an active home insurance policy in place and still experience a huge or total loss related to flooding.
Devastating flooding in South Louisiana from hurricanes has made headlines numerous times. If there is even a remote possibility of flooding in your area, it may make financial sense to purchase flood insurance as a precaution. In some instances, your mortgage lender may require you to purchase this type of extra coverage.
How Flood Insurance Works
When you have flood insurance on your property, you can file a claim against this coverage in the same way as you would file a claim for your standard home insurance policy in the event of flood damage. You will contact the insurance company to begin the claims process.
The claim may pay for repairs as needed up to your coverage amount and for many types of damage caused by rising water in your home. This may include electrical work, foundation or wall damage and repair, cabinetry replacement, flooring installation and more. Even a few inches of water in your home may cause thousands of dollars in damage, so it may be worthwhile to pay for this coverage and to avoid the financial risk associated with a potential flood.
Understanding Flood Zones
FEMA has created flood zones across the country. These zones can easily be researched online, and they can give you more information about the flood risk for your property. In a high-risk area, these homes may have a 25 percent chance of experiencing flood-related property damage within the span of a 30-year mortgage. Even properties that are located in moderate and low-risk areas may be at risk.
While mortgage lenders may require you to purchase flood insurance if your home is in a high-risk area, the coverage is usually optional for moderate and low-risk areas. However, keep in mind that as many as one-third of flood insurance claims since 2009 were in low-risk areas.
This indicates that there may be a huge benefit for purchasing flood insurance even if it is not required. Keep in mind that Louisiana is statistically the wettest state in the country, and it also has a high risk of being hit by hurricanes and tropical storms that can yield torrential downpours. More than that, southern Louisiana has a very low elevation, so it may not take much water for many areas to flood.
How to Find a Competitive Quote for Flood Insurance
If your mortgage lender has told you that flood insurance is required, you understandably need to find an affordable quote for coverage. On the other hand, if flood insurance is not required, you will need to decide if this optional coverage is worth paying for. You can research flood zones through the FEMA website to get a better idea about your property’s risk.
In addition, you should analyze your financial ability to cover possible flooding-related losses so that you can determine the potential financial benefit of this coverage. Understanding the cost of coverage is also important. Numerous factors impact the cost of coverage, including what flood zone you are in, the composition and value of your home, how far above ground your first floor is and more. While some home insurance companies offer flood insurance, you may need to look for coverage from a specialty provider. You could shop around and compare quotes on your own, or you can request assistance from an insurance broker.
At Robbie Breaux & Team, we are committed to helping each client find the right home in southern Louisiana. We can help you to research flood zones for each home that you are interested in, and we can help you to identify homes that are in a suitable flood zone for your risk tolerance. For more information about homes in the area and to begin working with our team, contact Robbie Breaux & Team today.