Flood insurance is becoming more and more important for many Florida homeowners. Many lenders and mortgage companies have made flood insurance cover mandatory for their customers till such time that the mortgage is paid off in full. If you are planning to buy a flood insurance plan, but are confused on what to look for and what you need to have in your plan, here are a few basics that you need to know about how much cover you need and how to go about calculating it.
When do you need to have a flood insurance plan?
- If you have already received flood relief assistance on a particular property, either owned or rented, you have to get it flood insured till you own or live in the said property.
- These insurance plans are mandatory for all houses in flood prone zones as designated by the government.
- If your property, owned or rented, had been declared a flood disaster area at any point of time, you need to have flood insurance. You will not be eligible for any government assistance without such insurance in case of another flood disaster.
How is flood insurance calculated?
There is no complex math involved in the calculation of flood insurance amounts and requirements. It has to correspond or exceed certain amounts, as detailed below:
- They need to cover at least the maximum grant and assistance amount given under various federal flood relief programs like Build It Back, FEMA’s Individual Assistance (IA) Plan, and others.
- The amount of insurance cover should correspond to your mortgage amount. The entire owed amount needs to be considered.
The government offers flood insurance plans for $250,000 or less. If you need insurance amounts higher than this figure due to higher mortgages or other reasons, you might have to buy a second flood insurance plan to cover the excess amount.
What is covered and not covered under flood insurance?
This is a very important consideration when buying flood insurance plans. Most plans will cover structural damage, cleaning costs and renovation or rebuilding costs in the aftermath of floods and destruction of property due to the same.
However, if you have expensive furniture or gadgets that you might want to get insured against floods, know that most movable property is not covered in most flood insurance plans. You will have to get such property insured separately under another insurance plan to avail benefits in case of flood destruction.
