Flood insurance is a good way to protect your property in the event of unexpected damage. It is tough to know what to look for in a flood insurance company, so here are some tips to keep in mind if you are considering taking out a flood insurance policy.
Focus on service, not cost.
Through the National Flood Insurance Program (NFIP), the federal government dictates the rates for home flood insurance policies. As a result, the cost should be the same across the board, so you should instead focus on the services provided.
Know your property zone.
Properties are mapped out into zones on a flood map. This map keeps track of what areas are at a higher risk for flooding than others. If your property is in a high-risk area, you may be required to pay more for your insurance. Additionally, some zones can require additional work on properties in order to help prevent damage from flooding.
Consider all of your options.
Since you are going to be looking at service instead of price, be familiar with what companies are providing flood insurance in your area. You may be able to purchase flood insurance from the same company that provides your home or auto insurance. If possible, keeping the same company is the best option as it will simplify your records.
Decide how much coverage you need.
Federal regulations caps insurance amounts at $250,000 for property damage and $100,000 for the contents of the property. Only purchase as much coverage as you need, but know that you are not limited to these amounts. If you feel that you would like more coverage, you can purchase additional coverage from a private company. Keep in mind that excess flood insurance policies will cost much more than average policies, so only look into these policies if you know you need the extra coverage.
Avoid hidden fees.
While coverage amounts are largely dictated by the federal government, individual flood insurance programs may have hidden fees in their policies. Stay away from companies that have extra, unnecessary charges included their policies.
Use the Flood Insurance Rate Map.
An official map has been issued by the Federal Insurance Administrator that outlines areas of flood damage and dictates policy payment amounts. If an insurance company does not refer to this map while figuring your policy rates then you should not purchase insurance from that company.
Ask the right questions.
Flood insurance is a good safety net to have, but having insurance will not do much good if you are stuck waiting for payments or trapped in a waiting period. Companies sometimes have a waiting period after purchasing a policy during which you will not be able to file claims. Take a look at what average claim times are for companies in your area and find the company that has the shortest claim time.
