Standard flood insurance is a type of policy that covers the home and its contents when rains, snows or other acts of nature, such as hurricanes, cause water damage to the home. Several types of flood coverage is available. For instance, the Preferred Risk Policy is an option for those living in low flood risk areas. The amount that the policy covers is determined by the amount of coverage purchased by the homeowner.
Who Needs Coverage?
Homeowners should always have flood coverage, even when the home is located on a hillside or other low-risk area. For instance, hillside homes are prone to damage from mudflows, which are a result of flooding. Homeowners should purchase coverage that is equal to the cost of rebuilding the home.
How Flood Coverage Works
Flood coverage is designed to help repair or rebuilt the home and replace any personal possessions that are damaged by flood waters. Typically, homeowners are required to meet the deductible outlined in the policy before the policy takes effect. Additionally, homeowners must wait 30 days before the policy becomes active. In general, at least two acres of property, or two homes, must be affected by flooding for the policy to cover the damage incurred.
To determine which type of policy to purchase, determine whether standard flood coverage is adequate for your region. Renters should choose a policy that covers only the possessions inside the home, while homeowners living in low-risk areas may opt for preferred risk flood coverage. In some cases, the mortgage holder or lender may require additional flood coverage in high-risk areas.
When purchasing a policy, an elevation certificate may be required to determine the amount of coverage needed to protect your home.