Real Estate Blog – Condotron

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20 Oct

What is Flood Insurance – Do I need it?

Posted in Insurance, Property on 20.10.09

Flood insurance is quite simply insurance that covers the damage inflicted on your home and personal property in the event of a tropical storm, excessive rain conditions, hurricanes, and other natural weather conditions that produce high volumes of water. Even man-made circumstances may cause flooding. For example, dams and levees that are neglected and ultimately break, and clogged sewer systems that back up creating massive water and filthy mud, are both ways in which floods happen.

And although many people think they know what flood insurance is, as it may be rather self-explanatory, they often mistakenly believe that general home Flood Insuranceinsurance covers these disastrous events. In reality, flooding is not covered and if you live anywhere near the coast or other areas prone to flooding, there is no doubt that you need flood insurance.

In addition to living in high-risk areas, statistics from, the official site for the National Flood Insurance Program, state that “nearly twenty-five percent of flood insurance claims come from low-to-moderate risk areas”. This specifically suggests that even homes in low water areas are susceptible to some type of flooding. As a result, the answer to whether flood insurance is needed or not is clearly, a resounding yes.

Another curious reason to purchase flood insurance is new development. It seems rather obscure to think about construction and land development as a means to flooding and a direct detriment to your home, but the truth is, as the environment around you changes, so do the ways in which water is handled. Where once fields and swamps received the run-off, now concrete pavement and buildings may exist with nowhere for the water to go.

Because of these conditions, the United States Congress enacted the National Flood Insurance Program (NFIP) in order to help property owners, renters and business owners so that they would not have such a financial burden in the event of a catastrophe. In order for communities to participate, they must put into place flood prevention rules and ordinances that at least meet FEMA (Federal Emergency Management Agency) requirements.

Agents are authorized to sell flood insurance and although the price is the same no matter who sells it, each individual may pay a different premium depending on the size of the building being insured, the age, and other pertinent factors affecting the policy rate. In addition, the policy will depend on the dollar amount estimated for personal content for which you are insured, so several decisions are required when purchasing a flood insurance policy.

Lastly, an important point to consider when purchasing flood insurance is the fact that the sooner the better is a wise approach. Many people, understandably, will try to save money in the hopes of buying only if the weather is predicted to be bad. This is not advisable, as accidents are not predictable but more importantly, the policy is not valid for the first thirty days, which means if you know a hurricane is on the way, you will not be covered.

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