Buy Flood Insurance To Protect Your Finances If Your Home Is Damaged By A Flood

A flood does a lot of expensive damage to your home, even if your home only has inches of water in it. If you live in a flood zone and have a mortgage, you're required to have flood insurance. If you own your home, then you should consider buying flood insurance whether you live in an area that is at high risk of flooding or not. Here are a few things to know.

Homeowner's Insurance Doesn't Cover Flooding

Flood insurance is separate from homeowner's insurance. In some cases, homeowner's insurance may pay for flooding caused by a burst water pipe, but flooding caused by storm runoff, overflown rivers, or exceptionally high tides, are excluded. Not every home needs flood insurance. If your home is in a flood zone as determined by its elevation on a land survey, then flood insurance will be mandatory when you take out a mortgage or loan on your house. Even though the policy is separate, you may be able to buy it through your local insurance agent or you can find an agent that sells flood insurance policies. A flood insurance policy doesn't go into effect right away, so you can't buy it for coverage right before heavy rains are expected.

The Cost Of Flood Insurance Varies

Several things affect the cost of flood insurance, so if you're looking to buy your waterfront dream house, you'll want to factor in the potential cost of flood insurance before you buy. Flood zones are rated according to risks. The higher the risk of flooding, the more you pay. If you're in a low risk zone, then flood insurance is more affordable and worth considering for the added protection even if it isn't required. In addition to the flood zone, your house affects the price of flood insurance. It will cost more to insure a luxury home than it would a small cabin.

Flood Insurance Coverage Varies

There are different types of flood insurance and each type has a cap unless you buy additional coverage. Flood insurance could pay for damage to the structure of your house, the contents inside the house, and the replacement cost of the house. Building coverage is the insurance you need to pay for repairs to the walls, floors, and structure of your house. Since this insurance has a cap,  if you live in a luxury home, you may need to buy excess flood insurance to make sure your home is protected. Contents insurance pays for flood damage to your furniture, clothing, and other personal items, and it's useful to have since replacing all your belongings would be a huge expense. When you buy flood insurance, take your time to talk to the agent about everything that is covered in your policy and what is not. This could save you from shock and heartache if your home is ever flooded and you find out you didn't have the right coverage or enough flood insurance.

Contact a company, like Amberg Insurance Center Inc, for more help.