Options for Flood Insurance
Does the term flood insurance confuse you? Do you feel like it is trivial insurance that you do not need? Read on to find out exactly how this insurance applies to you and what are your options.
Floods are one of the most common types of natural disasters in the United States. As little as an inch of water in the homes can cause damage greater than $25,000. Let’s dig deeper into flood insurance.
What is Flood Insurance?
Floods can cause damage worth thousands of dollars to your homes and businesses leading to a harsh financial blow. Your typical insurance policy most probably doesn’t cover damage due to floods. Flood water is surface water, which is water that hits the ground and enters your house. If the water comes in through a window or roof without hitting the ground first, it's not a flood in the eyes of the insurance carrier. This is especially important in covering flooding in basements. This is why separate flood insurance is needed which goes beyond the house owner’s standard policy. It will protect you from several types of water damage, including coastal storms, melting snow, and other unfortunate water-related incidents. You must be prepared for the worst and have remedial measures in place to help you in possible trying times. Therefore, investing in a good flood insurance policy is a responsible financial investment.
General Misconceptions About Flood Insurance
It is very common for people to underestimate the risk that floods pose, and ignore the importance of flood insurance. A major reason is the lack of proper awareness about the available and affordable options. A careless attitude toward financial protection and irresponsible investments is another reason. All these reasons combined result in irreplaceable financial losses. Relying on slow process governmental policies and general insurance policies to cover excessive damages due to floods can lead you towards losses that you cannot reimburse.
Floods are one of the most common disasters in the US compared to fires, earthquakes, and hurricanes. But most people are unaware of this fact. The only flood insurance that people opt for is the compulsory one for people in high-hazard flood zones. Even then, 50% of homes in high-risk zones as high as 99% of homes in low-risk zones are uninsured for floods.
Is there a solution?
The solution is a collective effort to incorporate consumer education, industry education, and the affordability of flood insurance. Firstly, more homeowners should know exactly what they are dealing with and the kind of damage they should expect in case of a flood.
Secondly, retailers, lenders, and agents should know all the available options of flood insurance to better facilitate clients. Lastly, the flood insurance process should be made simpler, more transparent, and affordable.
What are your options?
There are several options for flood insurance each with its own plus points. Here we will discuss two options for you. Originally, there were very few flood insurance options as most variations were written by the National Flood Insurance Program. However, now there are private firms that offer another option that is affordable and provides a larger coverage.
Private Flood Insurance vs typical NFIP Insurance
It is a government-designed policy that is provided by 50 insurance providers known as Write Your Own (WYO) companies. Being one of the many government policies it is a highly bureaucratic and slow policy that has limited coverage options for consumers. A typical coverage requires a 20-day wait, requires a mandatory elevation certificate inspection that can cost homeowners up to $400, and requires the consumer to fill a lengthy form of endless questions.
Private Flood Insurance
Private flood insurance is rather new to the market and was introduced in 2019 to supplement disaster aid and fill the gaps in NFIP policy regarding coverage of property loss. Insurers of Private flood insurance are better able to assess flood risks and provide reliable estimates to clients than NFIP which uses an outdated flood map. Neptune Flood Insurance and Aon EZ Flood are both great for getting the coverage you need. There is one thing to keep in mind, however; Neptune Flood Insurance will cover personal items (furniture, electronics) while NFIP and Aon EZ Flood do not cover them.
Why should you choose this policy?
There are an ample number of benefits and advantages of choosing private insurance over government ones. Some of which are outlined here.
Private Policies are Affordable
Many brokers who deal with both federal policies and private coverage states that private flood policy often costs less. Usually, a difference of 20%-50% is seen. The homes in high flood risk regions costing thousands of dollars can have a significant price advantage and make quite a saving with private flood policies.
They Provide Better Coverage
The maximum coverage limit for the NFIP policy is around $250,000. In the case of private insurance, it is not guaranteed that you will get higher coverage but, in some cases, private insurers can offer twice as much coverage as NFIP especially if your home is located in a low-risk area.
They are More Flexible
For NFIP the total value of covered possessions is jewelry, artwork, and other collectibles. This is not adequate coverage for a serious collector. In the case of private policy, depending on the type and value of the collectibles you need to be insured, the policy can be tailored.
Depending on your case, private policies can also reimburse living expenses in case the flood leaves your home uninhabitable.
The Overall Process is Quicker
If you find yourself suddenly facing a flood threat, it will be too late to get insured via federal policy. However, this is not the case for private policies. They can provide protection soon after you buy it. Compared to the 30 days wait for a federal flood policy, some private insurers can cover you in 10-14 days.
The Best Option for You
Neptune insurance is one of the fastest-growing and leading private flood insurers in the US. Their quoting platform is simple and can get you an estimate within minutes. Neptune provides the most accurate and effective flood solution in the US, with coverages up to $2 million for buildings and optional coverages not supplied by the NFIP, thanks to its patent-pending AI technology engine Triton. Because Neptune analyses risk at the individual residence level, private flood insurance is usually, but not necessarily, less expensive than the NFIP.
Hopefully, you and we are on the page in regards to the importance of flood insurance. If your next step is to look for a reliable and affordable flood insurance provider, we are at your service. Joyce Insurance will protect your property and belongings with a comprehensive and inclusive flood insurance policy, so get in touch today!