Buying Flood Insurance
After Hurricanes Katrina and Rita, many homeowners learned, too late, the value of flood insurance. Flood insurance protects you from the financial devastation caused by floods, expenses that may cost you thousands of dollars in repair and restoration costs. However, most homeowners insurance does not cover floods. It’s a single peril insurance that is sold separately. Flood insurance protects against losses to buildings and their contents, not the land surrounding them. To be considered a flood, the waters must cover at least two acres or affect at least two properties. Flood insurance is sold and serviced by private insurers, and backed by the federal government. The good news is, flood insurance costs the same wherever you purchase it, because the rates are set by the National Flood Insurance Program. If you are located in a high-risk area, federally regulated or insured lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower.