Floods have been the most common natural disaster in the US. However, your standard homeowner's insurance policies rarely cover damage from floods. Let's say you have a good house, but it's in a flood-prone area. If that's the case, you'll have to get flood insurance to avoid paying substantial out-of-pocket expenses after flood damage. However, the cost of this insurance varies. This article discusses factors influencing flood insurance premiums and why you need a comprehensive home insurance cover.

What is Flood Insurance Cover?

This insurance covers damage caused by weather-related floods. If you experience damage from heavy rainfall, storm surges, and overflowing bodies of water, the insurance covers the cost. However, this insurance does not cover floods caused by other water damage like broken pipes. While the law doesn’t mandate flood insurance, its necessity depends on your home's location and mortgage terms.

What Determines The Cost Of Flood Insurance?

According to recent data, the average cost of flood insurance in the US is approximately $859 per year. However, this cost varies depending on different factors. It can also change depending on your state. Here are some factors that influence the cost.

Location

The most significant factor that determines your flood insurance cost is your location. High-risk flood zones will always have higher premiums. Consider whether your house is close to a river or other flood source and how often the surrounding area floods. A home in such locations will demand a higher cost than those in low-risk flood zones. Accessing the Federal Emergency Management Agency (FEMA) website lets you know whether you are in a high-risk flood zone. They designate these zones based on historical flood data in the area.

Elevation

Another consideration is the elevation of your home relative to the Base Flood Elevation (BFE). This elevation can determine how much insurance costs you will pay. So, you can qualify for lower rates if your home is above the BFE.

Coverage Amount

The cost of flood insurance also depends on the amount of coverage you choose for your dwelling and personal belongings. Choosing higher coverage limits will mean paying higher premiums. Your insurance will cost more if you need more coverage.

Deductible

Like coverage amounts, deductibles can dictate how much you pay for flood insurance. A deductible is the amount you pay out of pocket if you file a claim. You can lower your premium with a higher deductible because you assume more financial responsibility. However, this may mean paying more out-of-pocket if there is a claim.

Building Characteristics

Your flood insurance rates can depend on your home's building characteristics, including age, construction type, and foundation. Older homes with outdated building materials are vulnerable to flood damage. So, you would expect such homes to cost more because of additional expenses.

Benefits of Home Insurance

Flood insurance is vital for flood-related incidents. However, you will get broader protection with comprehensive home insurance. So, you might want to combine your flood insurance with a robust home insurance policy. Comprehensive home insurance covers risks like fire, theft, and other water damages not related to flooding. So, your home will have protection cover against many potential threats.

How To Save On Flood Insurance

You can use several strategies to reduce your flood insurance costs. Use these steps to reduce some of your premiums.

Install Flood Vents

A flood vent allows floodwaters to flow through the home's foundation, reducing the risk of structural damage. Installing these vents can also lower your insurance costs. Focus on reducing the chances of flood damage in your home.

Elevate Utilities

Raising the electrical systems and HVAC units above the BFE can lower your insurance premiums. For example, these utilities can be moved to an attic or an elevated platform to protect them from flood damage.

Community Discounts

If you stay in a community that takes steps to lessen its risk of flood damage, you might get a discount on your flood insurance. You can find a National Flood Insurance Program (NFIP) Community Rating System in New York. Join the community and get discounts based on local floodplain management activities.

Reach Out To An Insurance Agency

If you live in a high-risk zone, you'll pay higher premiums for flood insurance. However, as a homeowner, you must understand the benefits of comprehensive home insurance. Please don't wait until it's too late to protect your home. Make the right decision by investing in the right insurance coverage.