Tips & Advice
What is a High-Risk Zone?
A high-risk zone is an area that the Federal government determines is more likely to flood. There are multiple categories of high-risk areas, and the category determines the cost of insurance. Homeowners living in high-risk communities that have opted in to the National Flood Insurance Program are required by law to purchase flood insurance.
What is the National Flood Insurance program?
The National Flood Insurance Program is the Federal program that insures homeowners, renters, and businesses living in communities that have chosen to participate. Managed by the Federal Emergency Management Administration (FEMA), it is sold through private insurance companies. In addition to providing flood insurance, NFIP works to improve floodplain management and to develop flood zone maps.
Is there flood insurance coverage available for businesses?
Yes, businesses can apply for flood insurance coverage through the National Flood Insurance Program (NFIP), sold through private insurance companies.
Are there ways to lower the cost of flood insurance?
Other than relocating to a home outside a high-risk zone, flood insurance costs will be lower if a homeowner:
- -Relocates all utilities to an area above the floodplain elevation, such as an attic.
- Ensures there are sufficient "flood vents" (foundation openings)
- Eliminates the crawlspace under the house by backfilling
- -Elevates the home with flood-resistant posts
Are flood insurance premiums tax deductible?
Flood insurance premiums are not tax deductible for home unless you use a portion of the home for a business. Flood insurance is tax deductible for an owned rental property.
Do renters need flood insurance?
Renters who live in a high-flood-risk area, especially in basement or first-floor apartments, would be wise to purchase "contents only" flood insurance, because standard renters' insurance will not cover damage caused by rain or tidal surges. The landlord's flood insurance would cover the building itself, but not the renter's contents.
What types of damage is not covered by flood insurance?
Flood insurance won't cover anything related to cash, precious metals or stock certificates. It also won't cover vehicles, post-flood mold damage, basement contents, sewer backups, temporary housing costs, or loss of income. Broken or leaking plumbing is not a flood loss, but might be covered by your regular property coverage. Outside the home, trees and plants, fence, pool, deck or patio, and retaining walls are on the long list of what flood insurance will not cover.
Does home insurance cover flood damage?
No. Home insurance will cover damage from a burst pipe or from a leaky roof, but it will not cover flood. A flood is temporary rising of water on land that is normally dry, causing general damage to multiple properties. Examples include a river or lake overflowing, mudslide, or water seeping into a home basement due to heavy rain
What damages does flood insurance cover?
Flood insurance covers for weather-related water damage, including some types of roof leaks and overflowing balconies. Flood insurance on a home covers the foundation, plus permanently installed fixtures, such as electrical, plumbing, heating/air conditioning, kitchen appliances and cabinets, paneling and carpet, plus detached garages (up to 10% of your homeowners policy), and debris removal. Flood insurance on personal property – a separate policy – pays the current cash value for clothing, furniture, electronics, washer/dryers, frozen food, and up to $2,500 in valuables, such as art and furs.
How much does flood insurance cost?
Flood insurance cost can just a few-hundred dollars or as much as $10,000 per year, but averages $600 - $700 annually. Location determines the home's "risk factor," which dictates the policy cost.