Flood insurance gives homeowners cash to repair and rebuild their homes after a flood. It’s an important option for those living in low-to-moderate risk areas and can be a smart investment for new or existing property owners.
While everyone is not required to buy flood insurance, mortgage lenders often need it if the property is in a high-risk area. Here are five key things every South Carolina homeowner should know about this coverage.
Know Your Risk
Flooding can be a significant issue for houses in South Carolina because of the state’s history with severe weather. A separate policy is required since standard homeowner’s insurance does not cover flood damage. The right coverage can help you recover more quickly and fully from flood damage. Flood insurance is available through the National Flood Insurance Program (NFIP) or private insurers. NFIP policies are backed by the federal government and sold through over 70 companies. Private insurers also sell NFIP policies but may offer different options for the deductible, the amount you are responsible for paying before your flood insurance kicks in.
Understanding your risk is the first step to getting the right South Carolina flood insurance. Using a FEMA map, you can find your home’s flood zone and the chances of flooding there. Coastal homes and areas near rivers tend to be at the highest risk, but severe storms can cause flooding even in inland areas. Checking your bet is simple, and it can be done online.
Review Your Policy
If you live in an area prone to flooding, it’s important to understand the risks and take steps to protect yourself. Getting flood insurance is one way to do this. The policy will help pay for cleaning, repairing and replacing your belongings and home. The cost of flood insurance will vary based on your property’s risk, but it can be affordable. On average, homeowners spend about $700 a year on their policy. Protecting your valuable belongings and home from flood damage is worth the investment. You can purchase flood insurance through NFIP or from private insurers. Many private companies resell the NFIP’s standard flood insurance. When evaluating your options, consider your home’s age and design and the likelihood of flooding in your community. Also, consider the deductible you’ll choose. Your premium will be lower the larger the deductible.
However, if you have to pay out of pocket before the coverage kicks in, you may opt for a lower deductible.
Check Your Deductible
Standard homeowners policies do not cover floods; even a single inch of water can cause thousands of damage. A separate flood policy is necessary to protect against this type of loss, and it can be much more affordable than you might think. Your home’s flood risk, its size and how it’s built will all factor into your rates. However, the deductible you choose plays a major role as well. Like homeowners insurance, the higher your deductible, the lower your premium. A flood policy’s deductible can be based on your property’s value or rebuild cost. A good rule of thumb is to purchase enough coverage to replace your belongings and the structure of your home if flood waters destroy them. Lenders for FHA, USDA and VA mortgages in flood zones generally require flood insurance. It’s also available to anyone who wants to buy it. Relief from flood damage without a policy can come in the form of federal disaster loans, but these must be paid back.
Have a Plan in Place
Flooding from hurricanes, tropical storms and heavy rains can be catastrophic for homeowners. Just one inch of water can cause tens of thousands in damage to property and contents. Since homeowners and renters insurance does not typically cover flooding, the best way to protect against catastrophic losses is through a private or NFIP flood insurance policy. FEMA maintains maps that identify the risk of flooding in different areas. Areas considered moderate- to low-risk, designated with letters B, C and X on FEMA’s map, may still experience floods but are less common than areas in high-risk zones (designated with letters A and V). Mortgage lenders require homeowners with federally backed mortgages in these higher-risk zones to carry a flood insurance policy. When a flood does strike, be sure to follow the instructions and advice of local government officials. It’s also important to document absolutely everything. This includes pictures of the initial flooding and all items in the flooded space. You’ll need this documentation for the insurance company to process your claim and reimburse you.
Contact Your Chosen Insurance Provider
Homeowners’ insurance does not typically cover flood damage, so a separate flood policy is essential. The National Flood Insurance Program (NFIP) offers federally backed policies that cover building and contents damage from flooding. NFIP policies are available for homeowners and renters in participating communities. Homeowners can also purchase private flood insurance policies, which may provide additional coverage options.
However, private insurance companies often outperform the National Flood Insurance Program (NFIP) by providing more tailored coverage options for homeowners. Unlike the NFIP, which has limitations, private insurers can offer policies that protect against flood damage and a broader range of perils, such as hurricanes and windstorms. Additionally, private insurers often excel in claims processing, delivering quicker and more efficient service, which can be a critical advantage during natural disasters. Your location and elevation are key factors that influence your flood insurance rate. Homes located closer to bodies of water tend to have higher rates than those farther inland. Also, lower elevations homes are more susceptible to flood damage from storm surges. The NFIP recently implemented a new risk rating methodology called RR 2.0. This change will have an impact on nearly all NFIP policies. The new method includes several factors in addition to location and elevation. A flood insurance policy is an important investment in a high or low-risk flood zone.