No one wants to invest in a holiday condo and have that investment go to waste in a freak flood! Invest the best flood insurance and keep your asset afloat
Research has shown that just 1 inch of water can cause over $27,000 worth of damage to your home. Thus if your holiday condominium is in an area prone to flooding and you don’t invest in flood insurance, you’re taking a massive financial risk.
But with so many variables affecting the price of flood insurance, finding the best coverage, at the best price, can feel like an impossible task. How are you supposed to know which policy is right for you?
This article aims to shed some light on this dilemma, hopefully making it easier for you to buy flood insurance. If you make it to the end of this post, you’ll understand how flood insurance works and what it takes to find the best flood insurance plan for your situation.
Do You Need Flood Insurance?
Most standard homeowner insurance policies will not provide flood insurance. So if you think you’re already covered, think again.
If you’re going to buy flood insurance, you’ll find it’s best to buy a policy from the National Flood Insurance Program (NFIP). This is a program that’s federally regulated, and it’s designed to provide flood insurance for homes that are at risk of flooding.
In some cases, you’ll need to invest in this insurance, before a lender provides you with a mortgage for a property that’s in an area prone to flooding.
When you invest in an NFIP policy, you’ll have cover for two scenarios. Firstly, you’ll have $250,000 worth of coverage for the building itself. But you’re also provided with $100,000 of coverage for the contents of the building.
Something to keep in mind is that NFIP coverage considers basements to be very risky. This means that damage to a basement, and even the items in a basement, generally aren’t covered by NFIP policy.
How Much Does Flood Insurance Cost?
Like all other insurance policies, you can get NFIP coverage with the help of an insurance broker.
The amount you’re going to pay, though, is going to depend on a wide range of factors. For example, if your building is within something known as a flood zone, your policy will be more expensive than average, as your home is in a high-risk area.
Thus, you’ll only know the true price of the policy, after giving the insurance broker all the relevant details.
Is NFIP the Only Option?
For most people, NFIP coverage is the best option available. But there are companies that’ll provide private flood insurance too.
Some of these policies can be more expensive than what you’d expect to pay for an NFIP policy. But this extra cost can also come with some benefits.
For instance, if a flood damages your home, a private policy may provide temporary accommodation. This isn’t something you’d experience with an NFIP policy. If you’d like to learn more about the private flood policies on offer for condominiums, check out this informational guide.
What’s the Definition of a Flood?
NFIP flood insurance will cover situations where there is a significant surge of water inland. If an area of 2 acres or more is underwater, despite being usually dry, it’s defined as a flood. You can also call something a flood if water is inundating more than two properties, one of which can be yours.
NFIP policies will not cover items that experience rainwater damage, due to an open window. If you want more details on what counts as flood damage, you should double check the policy before signing.
Preventing Flood Damage for Your Home
If you’re able to limit the amount of damage a flood can cause to your home, you’ll be able to get more out a modest insurance policy. For example, with a suitably protected property, $100,000 of damage might only amount to $50,000 of damage.
One step you can take is to ensure certain items are above ground level. For instance, if you own air conditioners, you might fit them high up on the wall. Following this, these items will not get wet during a flood, thereby making them less prone to damage.
Taking these steps can also make the property safer if there’s a flood because electrical items will not come into contact with the water.
You might also want to use tiles on the floor, instead of carpeting. Replacing the carpet for an entire ground floor can amount to a lot of money. But with tiling, all you may need to do is clean the tiles, once the flood water is no longer in the property.
If you want to take a drastic step, you can consider raising your home. Taking this step can also help improve the value of a property, as it’s now more desirable for people that like the area, but worry about floods.
During the elevation process, a house is lifted about 3-4 feet. This is enough to protect the home from water damage, but not so much that the home looks unusual. In fact, with the help of some creative landscaping, the changes aren’t that obvious.
Obviously, you can’t ask for a condominium to be elevated. But you can ask if the condominium was elevated, during the construction process.
Should You Invest in a Flood Risk Assessment?
So far, we’ve explored fairly generic ways you can reduce the risk of flood damage. If you want to know how you can protect your property specifically, you should hire someone to conduct a flood assessment on your property.
When you do this, an expert will visit your home and make recommendations on how you can reduce the risk of flood damage. Though this service can be expensive, you might still save money in flood repair bills, if you act on the recommendations they give you.
Do You Know How to Find the Best Flood Insurance?
With the right kind of flood insurance, you should be able to bounce back from even the worst types of floods.
This post has provided some insight into how you can find the best flood insurance for your needs. You should know that your homeowner’s insurance likely doesn’t offer any protection from a flood. It also helps to understand the difference between NFIP insurance and private flood insurance.
Ultimately, you should think about taking steps to reduce the damage caused by a flood. If you can do this, you’ll be less reliant on insurance, as your claims won’t amount to much, thanks to your preventative measures.
Thinking about moving house? Check out this post for some tips!