Flood Insurance

Flood Insurance

The other day, I received my bill for Flood Insurance and was shocked at the price. I moved to Florida in 2000 and had a home built by one of the major builders. The cost was slightly over $200 and I thought it a good idea, even though I am not in a flood zone [to protect my home] because it had a pool and there was a berm directly behind my property. Well, here it is 15 years later and I got my new bill: $655/yr. I went on the My Flood website and it asked for me to log in with my policy number. By answering a simple question:
Do you or you spouse live there over 80% of the time, I saved over $200. If you are carrying flood insurance now and want to save money, go sign in and answer that question! Here are some facts about floods, which may open your eyes and possibly convince you to buy flood insurance if you haven’t done so already:
  • In the past 5 years, all 50 states have experienced floods or flash floods.
  • Everyone lives in a flood zone.
  • Most homeowners insurance does not cover flood damage.
  • If you live in a Special Flood Hazard Area (SFHA) or high – risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance.
  • Just a few inches of water from a flood can cause tens of thousands of dollars in damage.
  • Flash floods often bring walls of water 10 to 20 feet high.
  • A car can easily be carried away by just two feet of floodwater.
  • Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding.
  • New land development can increase flood risk, especially if the construction changes natural runoff paths.
  • Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
  • Homes and businesses in moderate – to low-risk areas may qualify for the low-cost Preferred Risk Policy.
  • In most cases, it takes 30 days after purchase for a policy to take effect, so it’s important to buy insurance before the storm approaches and the floodwaters start to rise.
  • In a high-risk area, your home is more likely to be damaged by flood than by fire. Even though flood insurance isn’t federally required, anyone can be financially vulnerable to floods.In fact, people outside of mapped high-risk flood areas file nearly 25% of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistanceforflooding.
  • When your community participates in the Community Rating System (CRS), you can qualify for aninsurance premium discount of up to 45% if you live in a high-risk area and up to 10% in moderate-to low-risk areas.
  • More than 5.5 million people currently hold flood insurance policies in more than 21,800 communities across the U.S.
  • The two most common reimbursement methods for flood claims are: Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to at least 80% of the building’s replacement cost.
For more policy and claim statistics, visit the National Flood Insurance Program.
Reprinted from WWWFloodsmart.gov

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