FAQs for First-Time Home Buyers about Flood Insurance

Insurance isn’t something you want to skimp on, whether it’s auto insurance, home insurance, or flood insurance. We all know the importance of the first two. Home insurance protects us from a bad accident or disaster that takes place on our property. Auto insurance protects us from being liable for damages to someone else’s vehicle if we cause an accident. But flood insurance? When people think of flood insurance, most are more likely to think of natural disasters such as hurricanes Katrina and Harvey.

Every year we see massive headlines for hurricanes and floods across the nation. Thousands of people are negatively impacted by annual flooding, yet most of these people don’t have the insurance they need to cover the costs. Don’t leave it up to chance. You need flood insurance protection as fast as you can get it, and Neptune Flood is here to help you every step of the way. When it comes to flood insurance many people have questions, especially first-time homebuyers. If you’re one of those first-time buyers, worry not! We’ve compiled a list of FAQs just for you to help you better understand what flood insurance is and why you need it.

What is Flood Insurance?

Flood insurance is coverage for anyone that wants to protect their assets from the unknown dangers of rising waters. Every home in every geographical area of the world has some sort of risk for flooding. Some live in a higher-risk zone while others live in a lower-risk zone. But even if you live on a hill or on another part of your property that does not usually flood, you should still consider purchasing flood insurance.

Forbes states that between 1994 and 2013, over 3,200 flood insurance claims were filed with the federal government. Flood insurance claims represent just over $10 billion in losses over the past twenty years; however, experts estimate that more than 80% of losses were uninsured. In addition to flooding caused by natural disasters (including hurricanes), floods can occur due to blocked drains and poor construction practices within a building itself.

How Do I Know if I Need Flood Insurance?

If you have a mortgage on your home and live in a high-risk flood area, it is required that you have flood insurance. There are different types of flood insurance policies available. Each one offers different levels of protection and different coverage options, so be sure that you choose the right type of policy for your needs. Contact our team to help you choose the best coverage for your situation! It’s important to know that homeowners’ insurance does not cover home damage caused by flooding. Flood insurance is a separate policy that must be purchased and maintained separately from your home’s homeowner’s policy.

Choose a comprehensive program that includes building and contents coverage to get the most protection. Building coverages will insure the structure itself. Contents coverages will insure the items inside of your home that may also get damaged. You should evaluate the value of the items in your home to purchase the appropriate amount of coverage when purchasing your policy. Once you have the right type of flood insurance, you can rest easy knowing that in the event of a flood, your home or business and its contents will be covered and protected.

What Is a Flood Zone?

A Flood Zone is a geographic region that has been identified as being at high risk of flood damage. This can take place in the form of a Federal Emergency Management Agency (FEMA) map, which shows all known flood zones in the United States. Suppose you live in a flood zone, and you purchase flood insurance. In that case, you will need to be aware that certain areas on your property may trigger additional insurance requirements (such as having an elevated basement or small pool at the end of your driveway). Most flood coverage companies will require you to maintain uploaded maps of your home and surrounding areas. With Neptune Flood, we don’t require elevation certificates to quote or bind a policy for your property. This saves you time and money!

FEMA defines a flood plain as “a geographic area where there is a substantial chance of flooding during a given period, typically at least once in a 100-year event. Flooding is a natural phenomenon, and man does not cause it. However, flooding can be caused by human activities, such as the construction of buildings or roads near a flood plain.”

How is Flood Insurance Calculated?

Within the first five years of a home’s existence, most lenders will require that you get a flood certification from the National Flood Insurance Program. This certification will let you know which flood zone your home falls into. The insurance company will then decide whether you need flood insurance for your property by comparing your home’s value to the maximum amount of coverage available for that area. Your premium will then be based on this information.

Your lender will require a flood certification to keep your flood insurance in place at least every five years. You will also need to check your flood insurance policy each year to ensure that you are covered. And if you move, you will need to provide the new address to your insurance company within 30 days of moving for them to update their records.

Is Flood Insurance Worth It?

The main reason that so many homeowners choose not to purchase flood insurance is that they believe that a flood will not impact them. But this isn’t true! Floods can happen at any time, anywhere, and the damage from a flood can be severe. Often the government will not reimburse you for your losses (or give you a tax break), leaving you and your assets literally “underwater.”

As mentioned, if your property is identified as “high risk” (A and V flood zones), most lenders require you to have flood insurance. Regardless of where you live, no one is without potential flood risk. Wherever it rains, it can flood. Since 25% of all flood claims are located outside of “high risk” zones, only you can answer this question. You might consider the cost of insurance vs. the average paid claim of $46,000 to decide if you can afford to cover your own loss.

Conclusion

Flood insurance is a necessity for homeowners, and Neptune Flood Insurance is here to help! Head to our website to quote and purchase the flood insurance coverage you need. Give your family the peace of mind they deserve, knowing that your insurance coverages will protect your financial assets to help you start again. Contact us today and you’ll be ready for the worst, backed by the best.