If flooding is a risk to your home, you need the right flood insurance. Learn here what flood policy is best for you.
Flood insurance protects your property from flood damage, which home insurance won’t cover. When looking for the best flood policy, you’ll want to look at flood insurance policy cost, flood risk in your area, what coverage limits you need and the provider’s customer satisfaction history. This article will go over:
You can purchase flood insurance direct through FEMA’s National Flood Insurance Program (NFIP), or through private flood insurers who sell NFIP policies. Since NFIP is the source that all flood insurance comes from, basic flood insurance prices are pretty much the same regardless of where you buy your policy.
The price difference between NFIP flood policies and those sold by private insurers often comes down to whether you get excess flood coverage. NFIP policies pay out a maximum of $250,000. With excess flood coverage, private insurers are able to provide for coverage limits above the NFIP’s limits.
Beyond the cost of flood insurance, the main things you want to look at include the flood risk you face, policy limits, and what a flood insurer’s customer satisfaction rating looks like.
To pick the best flood insurance policy, you need to understand your choices.
Your chances of a flood occurring are a big factor when choosing your flood insurance. Flood insurance comes as either a preferred risk or standard risk policy:
Preferred risk flood insurance is for homes in high-risk flood zones. FEMA defines a high-risk flood zone as an area that has at least a 1% of being inundated by a flood in any given year. This is also known as the “base flood” risk. You can find what kind of flood zone your house is in at the FEMA flood map service center.
Standard risk flood insurance is more for moderate-to-low risk flood zones. Moderate to low-risk flood areas are defined as having a .02% to base flood-level chance of inundation in a given year. Both policy types provide the same coverage, but preferred risk coverage has a higher premium due to the risk factor. The average price for flood insurance is $700 yearly but again, areas with a long history of flooding can see higher rates.
Keep in mind that zoning for flood risk can change in your area. If you can, find a flood insurance provider who can offer both policy types. This will save you a lot of time if the area where your home is ever gets re-zoned for floods.
Whether it’s private flood insurance or not, how well and how quickly a flood insurer takes care of their policy holders is a strong point of competition. Industry ranking companies such as J.D. Power and AM Best are good places to compare flood insurance providers.
We've compiled our own list of top flood insurers based on their policy benefits, financial strength and reputation. Our picks for the best flood insurers are:
Amica ranked highest in property insurance claims experience for its 8th year straight in J.D. Power’s 2019 U.S. Home Insurance Study. One of the longest-lasting insurance companies in the country, Amica provides flood insurance in 48 states. Their strength as a flood insurance provider lays primarily in the financial backing they have. A.M. Best, an international credit rating agency whose sole focus is the insurance industry, gave Amica an A++ rating for financial strength.
In just 11 years, TFIA has written more than 50,000 private insurance policies in 37 states. A standout feature is their offering of way to lock in your annual premium for the following year. They have been nominated twice for FEMA’s “Agency of the Year”, given to insurance agencies that have made significant contributions to the NFIP.
In the J.D. Power 2019 U.S. Home Insurance Study, the Hartford ranked third nationwide for customer satisfaction. The Hartford’s flood insurance includes rapid response vehicles that can get to flood-affected areas quickly. This allows them to provide quick claims resolution and support when disaster hits. They also have long-standing relationship with AARP and provide many benefits to members. This makes them an excellent choice for homeowners 55+ years of age looking for flood coverage.
Other companies that provide consistently good quality flood coverage include State Farm, GEICO and Farmers Insurance.
Private flood insurance providers tend to have better coverage limits than NFIP-direct policies. You should look at what amount of flood coverage you need before deciding which type of provider to go with. You should also look at what a specific flood insurer’s policy doesn’t cover. Some flood insurers don’t cover basements, for example.
All flood insurance policies come from the NPIF. However, private flood insurers have also appeared in recent years. They offer other flood coverage options to people living in flood zones. Both NPIF and private flood insurers have benefits and drawbacks to consider when looking for flood insurance.
Because of their unreliability, a mortgage lender may reject a private flood insurance policy. Mortgage lenders often require mortgage holders in high-risk flood zones to have flood insurance. This can put you in a difficult spot.
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