30 days and counting: The case for flood insurance

I’m writing this article in response to the terrible damage that Hurricane Florence left behind. It’s hard to have perspective when buying flood insurance because most of the country isn’t located within a flood zone. When a hurricane is bearing down on you, it’s easy to say you want the coverage, but the real time to decide is now.

With 10% of households impacted by Hurricane Florence on Carolina coast having flood insurance and only 5.1M of all US households having it, it’s no wonder clients begin to panic at the last minute.

Almost all flood insurance can’t be purchased less than 30 days before the effective date of the policy. Some high-end carriers will allow for coverage to go into place sooner, however, those same companies typically suspend writing flood insurance if they predict a catastrophic event is on the horizon.

Here are five answers to the questions you should be asking yourself now:

1. Does my homeowners or renters insurance cover floods?
No, homeowners and renters insurance generally do not include flood insurance. Flood insurance must be purchased separately.

2. What is the National Flood Insurance Program (NFIP)?
NFIP is a government run flood insurance program governed by FEMA. Most primary flood insurance is purchased from NFIP, which can be handled directly with the program or through an insurance carrier that you use for homeowners insurance. Some insurance carriers offer excess coverage or fill gaps that may exist in the NFIP product.

3. Do I need flood insurance?
Typically, a mortgage lender or federal assistance program will require you to have flood insurance if you are in a high-risk zone. Otherwise, you’re not required to purchase flood insurance. Wesfair highly suggests to our clients who are located in low- and medium-risk zones to consider purchasing flood insurance, especially if their home is located close to a body of water (lake, river, ocean, swamp) or at the bottom of a slope.

4. How do I know if I’m in a high- or medium-risk zone, near a body of water or at low elevation?
You can use the FEMA flood map by entering your address: https://msc.fema.gov/portal/search. Further, Wesfair can assist you in assessing flood risk.

5. How much does flood insurance cost?
Primary flood insurance is provided by NFIP and is governed by FEMA. The good news is that the cost will be the same no matter which insurance carrier you purchase it from. The cost is determined by many factors including but not limited to the year of construction of the home, the occupancy, the # of floors and the flood zone as determined by FEMA. If you are in medium or low-risk flood zone, the price can be significantly cheaper than if you were in a high-risk zone because your home would be classified as a “preferred risk.”