Low Cost Flood Insurance

It’s expensive to be a property owner. Not only is there a loan to pay, but you also have to make room in the budget for maintenance costs, utilities, and property taxes as well. Oh, and you can’t forget to buy an insurance policy for your home or business either! These are the “basics” of being a property owner, but there are still many “extras” that can result in more expenses. Flood insurance is a good example of an “extra” that can result in higher expenses, unless you are able to find low cost flood insurance.

So how do you go about finding low cost flood insurance? First of all, you should define what “low cost” means. Typical insurance policies do not cover damages that result from naturally occurring floods. As little as an inch of this flood water can result in tens of thousands of dollars in damage. If you do not have a flood insurance policy, you must pay for those damages out-of-pocket or with loans- both of which can be financially devastating and make it difficult or impossible to rebuild. For most property owners, a flood insurance policy costs only several hundred dollars per year, making it a low cost investment from the offset.

But maybe you live in an area where flood insurance premiums are very high for one reason or another, costing you thousands of dollars each year. How can you find low cost flood insurance then? In some cases, “finding” low cost flood insurance requires some home improvement projects. Structural damage, as well as damage to expensive appliances such as a hot water heater, furnace, or air conditioning unit are among the highest costs associated with flood damages. Building new structures (or rebuilding flooded structures) above or beyond the Base Flood Elevation (level to which water is likely to rise in a flood) is one way to cut flood insurance premiums, as is building platforms which will elevate expensive appliances above the Base Flood Elevation. Yes, the upfront costs of these projects may be high, but the lifetime savings in flood insurance premiums can be worth the investment.

Almost any time you hear someone talk about saving money, you will hear them talk about price comparison. If you are searching for low cost flood insurance, you will need to do some price comparison between flood insurance programs. The National Flood Insurance Program (NFIP) is the oldest flood insurance program on the market,  offering government-backed policies to property owners living anywhere in the United States. Newer to the market is the National Catastrophe Flood Insurance Program (NCIP). Policies from the NCIP are privately underwritten and are currently available in only a limited number of states.

Some points to consider as you compare between the two: The NFIP has a more established history than the NCIP, but some policyholders are now facing astronomically high premiums as the NFIP tries to correct a multi-billion dollar deficit. The NCIP offers more comprehensive and higher coverage limits at a lower rate, with less red tape holding up the approval and coverage process, but is not available in every state.

The process of finding low cost flood insurance may not be fast or easy, but it can be done! Talk with your local insurance agent, and any other local agents who offer flood insurance policies through the NFIP or NCIP, and discuss your options today.

All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.

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