Flood insurance is one of those things that most people never have to worry about until they actually need it. And when you do need it, you quickly realize just how expensive it can be.
Why is flood insurance so expensive? Is there any way to get around paying these high rates? In this article, we will explore the flood insurance cost per month and try to answer some of these questions.
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What Is Flood Insurance?
Flood insurance is a type of property insurance that provides coverage for damage to your property caused by flooding. This includes both the water and the mud that often comes with it.
Is Flooding A Serious Issue In The US?
Flooding is a serious issue in the U.S., especially if you live near a river or lake that has experienced flooding before. According to the Federal Emergency Management Agency (FEMA), 20 percent of flood insurance claims are paid out to homes more than 100 feet from rivers, lakes, and streams.
And even if your home is not located close to water, it can still be affected by floods due to heavy rains or melting snow.
Why Is Flood Insurance So Expensive?
There are several reasons why flood insurance can be expensive. One reason is that it is not a common occurrence, so there is less demand for this type of policy. As a result, insurers are able to charge higher rates.
Another reason is that flood insurance covers a lot of ground. Not only does it cover the damage to your property, but it can also help reimburse you for any additional living expenses if you have to evacuate because of a flood.
This broad coverage means that insurers are taking on more risk when they offer flood insurance policies. And as we all know, the more risk an insurer takes on, the higher the premiums will be.
Can I Get Around Paying These High Rates?
Unfortunately, there is not much you can do to get around paying these high rates. The best thing you can do is shop around for a policy that offers the best coverage at a rate you can afford.
In some cases, you may be able to find a government-backed flood insurance policy that has lower rates than those offered by private insurers. However, these policies often have less comprehensive coverage.
Is Flood Insurance Required?
In most cases, flood insurance is not required. However, there are a few exceptions.
If you live in a high-risk area for flooding, your lender may require you to have flood insurance. This is because if there is a flood and your property is damaged, the lender may not be able to recoup its losses from the government.
Additionally, some homeowners insurance policies include a clause that requires you to purchase flood insurance if you live in a designated flood zone.
How Much Does Flood Insurance Cost Per Month?
The cost of flood insurance can vary greatly depending on several factors, including the amount of coverage you need, the type of policy you choose, and your location.
However, on average, flood insurance will cost you around $150 per month. This may seem like a lot, but it is important to remember that flood insurance can provide you with much-needed coverage in the event of a disaster.
How To Save Money On Flood Zone Insurance
The best way to save money on flood zone insurance is by shopping around. There are a number of different insurers that offer flood insurance, so it is important to compare their rates and policies before making a decision.
Another option for saving money on your flood zone insurance is by raising the deductible. The deductible is the amount of money you will have to pay out-of-pocket before your policy starts covering damage costs.
For example, if you raise your deductible from $250 to $500, then you may be able to reduce your monthly premium by as much as 15 percent. Just make sure that you can afford this higher deductible in case something happens.
Here are some more tips to consider:
Shop Around For Different Insurance Providers
As we mentioned above, there are many different insurance providers that offer flood zone insurance. It is important to compare their rates and policies before making a decision on which one to go with.
Raise The Deductible
Another way of saving money on your flood zone insurance is by raising the deductible. The higher deductible you have, the lower your monthly premiums will be.
This can help reduce expenses in case something happens and you need to file a claim for damages caused by flooding or other natural disasters like hurricanes or tornadoes. Consider whether this option would work best for you based on how much risk tolerance as well as affordability it requires from you.
Consider Getting Higher Coverage Than Required By Law
Sometimes people get into situations where they do not have enough flood zone insurance because they did not really think about what kind of coverage is required by law in their area.
For example, some states require homeowners insurance policies to cover both flooding and wind damage.
If your house is located near a river or other body of water, then this could be something worth considering before purchasing any type of policy from an insurance company.
Ask Your Agent About Discounts And Other Ways To Save Money
Your insurance agent may be able to offer you some discounts on your flood zone insurance policy. For example, if you have multiple policies with the same company or if you are a loyal customer.
Additionally, many insurers offer a discount for buying coverage online as opposed to through an agent.
Be sure to ask your agent about all of the different ways that you can save money on your flood zone policy.
Do Your Research
It is important to do your research before buying any type of insurance policy, and flood zone insurance is no exception.
Make sure you read more about what the average cost of coverage is in your area as well as what kind of damage is typically covered by a flood insurance policy. This will help you make an informed decision about whether or not purchasing this type of coverage is right for you.
Learn More About Flood Insurance
The flood insurance cost per month can vary on a lot of different factors. Still, you can save money on your flood insurance cost by following the tips above.
Do you want to learn more about insurance for homeowners? If so, check out more helpful articles from our blog.