Floods are a very common natural disaster. In fact, there is almost a 1 in 4 chance that you may experience a flood during your 30-year mortgage period. Floods can wreak devastating havoc on your property and items. Unfortunately, floods are not covered by many homeowner’s insurance policies. Flood insurance is its own separate insurance that protects you against damage caused by floods. Read on to learn more about flood insurance.
Flood Insurance Overview
As said above, damage caused by a flood is often not covered by regular homeowner’s insurance. Some people have the option of purchasing flood insurance. Other people, like those located in high-risk areas, are actually required by their mortgages to purchase flood insurance. Flood insurance works like any other insurance policy. You buy a policy and submit a claim if your home is damaged by a flood. The company can then fulfill your claim.
Some people believe that they do not need flood insurance because there have been situations in which the federal government has helped reimburse homeowners for losses secondary to floods. However, federal assistance is limited. It either comes in the form of a loan that must be paid back or comes in the form of a FEMA disaster grant, valued at about $5,000 on average. Additionally, the President must declare the event a disaster event. Not all floods qualify as a disaster event. In comparison, flood insurance policies pay out about $40,000 on average.
What Flood Insurance Covers
Flood insurance is relatively comprehensive and covers many different examples of damage caused by floods. It mainly covers things found inside and outside of your home. This includes the bones of your home, like your foundation, heating, and electrical systems, fuel tanks, etc. It also includes more decorative items, like appliances, windows, carpets, blinds, and garages. Essentially, if your home is damaged by a flood, flood insurance covers the damage.
Flood insurance covers any damages caused by floods. However, many companies define “floods” in a very particular way. In particular, a flood is an excess of water on land that is normally dry and affects two or more acres of land or two or more properties. This means that if your damage is caused by water, it is only covered if it meets the definition of a flood.
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Flood insurance is a vital part of protecting your home against natural disasters. Call a Redwood Agent to get started today!