You Need Flood Insurance Options (and We Have Them)
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You Need Flood Insurance Options (and We Have Them)

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The NFIP & You: Why You Need Flood Coverage

Do you know about the National Flood Insurance Program (NFIP)? Many people won’t have heard of it, but chances are high that if you already have flood coverage on your home, you have it through the NFIP. The NFIP was designed with affordability in mind, and for years it has been effective at helping manage floodplain regulations and reduce flood risk overall.

Please be aware that you need flood coverage, because standard homeowners policies do not cover flooding.

What About Private Flood Insurance?

However, at SBU we know that options are important. We want to help you decide what’s best for you and your needs, and while that may be flood coverage through the NFIP, it may not be.

So what are the other options? Private flood insurance through various insurance carriers.

This type of policy is independent of the NFIP in regards to coverage and rating, which means that it can be advantageous in the right situations.

Here are some potential highlights of private flood insurance:

  • Higher coverage limits – up to $1,000,000 for homes and $500,000 for personal property
  • Additional automatic coverage for outbuildings, such as pole barns
  • No special coverage restrictions for basements
  • Additional living expense and loss of rent coverage (with some restrictions)
  • There is not the traditional 30-day waiting period and no elevation certificates required
  • Competitive premiums

What Are the Downsides?

Remember, private flood insurance may not be right for you. Consider:

  • If you switch from NFIP coverage to private and then back again, you may lose lower previous rates, due to the NFIP’s rating methods
  • Some mortgage lenders won’t accept private flood insurance, e.g. FHA lenders
  • With private insurance, your coverage might not renew in the future, e.g. due to losses or poor market conditions

Because of these possible downsides, when you apply for private flood insurance, you’ll have to read and sign off on a summary of potential consequences related to switching from NFIP to private coverage.

Making the Complex Simple

If you haven’t purchased flood insurance, you need to be aware that a standard homeowners policy does not cover flooding. When it comes to flood coverage, the NFIP is an option, but not the only option. There is private flood insurance available and the right insurance advisor can help you determine what’s best for you.

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