If you live in a high risk flood area your home has a 26% chance of suffering flood damage at some point over the course of your thirty year mortgage. That means that there is a 26% chance that you?re going to need to file a homeowners claim using your flood insurance, which means that there is a 26% chance that your insurance company is going to have to pay out a claim.
They hate having to do that.
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Because insurance companies are in the business of making money they want to minimize the chances that they?re going to have to pay out a claim. That can take the form of denying you flood insurance altogether or raising their premiums and deductibles so high you?re almost better off putting the money into a savings account and paying the bill personally when disaster strikes. Fortunately, there are steps you can take to lower the premiums on your flood insurance (and boost your chances of obtaining coverage if you live in a high risk area).
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PREMIUMS AND DEDUCTIBLES
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First and foremost, keep in mind that there is a direct relationship between your deductible and your premiums when it comes to your flood insurance. While no one wants to have to pay a ridiculous deductible if their home is damaged in a flood after spending years paying their homeowners insurance in good faith, if you can afford an extra two to three hundred dollars in deductibles your can dramatically lower your annual premium. Keep in mind that by raising your deductible you are actually electing to take the money you?re saving on your premiums each month and put it into a savings account for when disaster strikes. Chances are, you?re going to be able to put a lot more away in what you save each month than you?ll ever have to pay out for damages.
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LOSS MITIGATION
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Secondly, mitigate your losses. In English that translates to doing everything you can to minimize the damage that your home will suffer if (and when) Mother Nature decides to turn Main Street into her own personal swimming pool. This reconstruction can be expensive, but it will save you a bundle on your home insurance and go a long way toward keeping your home livable after a flood.
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FEMA and the National Flood Insurance Program (a branch of FEMA dedicated to providing flood insurance in high risk areas) recommend that you raise your utility connections and electrical outlets well above ground, seal your basement with waterproofing compounds and, if floods are a regular ?thing? in your part of the world, consider elevating and reinforcing your home?s structure.
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?Not only does mitigation save life and property, a mitigated home may also qualify for lower-cost flood insurance, made available through the National Flood Insurance Program,? stated federal coordination official Anthony Russell following severe flood damage in Washington State in 2003.
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If you live in an area prone to flood damages flood insurance is going to become an important part of your life. Don?t let your home and your family suffer by not making the investment.
Michael McDonough is a National Account Executive for QuoteScout.com. Since its launch in 1996 the company has specialized in matching consumers requests for insurance quotes with multiple insurance quotes from both local agents and national insurance carriers. For more information on protecting your home from floods and water damage, please visit QuoteScout on the web at QuoteScout.com.
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