Floods come again. Is it time to get flood insurance?
Standard homeowner insurance generally covers water damage, but that's different from flood damage. Flood insurance is offered through a separate policy and specifically covers property damaged by a flood.
What's the difference between water damage and flood damage?
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Water damage can be as simple as a pipe leaking or a washing machine breaking and damaging belongings. A flood has a specific description, defined by the National Flood Insurance Program as 'a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties.'
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Do I need to get flood insurance?
It depends. People who live in a designated floodplain face higher flood risk and should consider getting flood insurance -- if they don't have it already. The government has created an
Even if your house is not within high-risk zones, you might be close to one. In that case, you might still want to get flood insurance.
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In other cases, your house may not be near a high-risk flood zone, but it could still be at risk of flooding if, for example, it's at the bottom of a hill or a cul-de-sac. Again, you might consider flood insurance.
How do I get flood insurance?
Many homeowners insurance brokers offer flood insurance in a separate policy. If you can't find a reasonable private policy, the federally-run National Flood Insurance Program is an option. The federal insurance is usually cheaper than private policies, but has lower coverage limits.
How much does it cost?
The average flood insurance cost in Massachusetts is $1,142 per year from the NFIP program, according to the personal finance company,
Properties located in flood zones but at higher elevations might qualify for reduced policy rates. You can request an elevation inspection through
What about coverage?
The downside to purchasing flood insurance through the NFIP is its coverage cap. The maximum building property coverage is $250,000 and content coverage of $100,000. Private insurers can offer a much higher coverage, but it comes with a cost.
Motor vehicles are not covered by flood insurance, but auto policies with comprehensive insurance typically cover flood damage.
I want to sell my property, should I cancel my flood insurance?
Not yet! If you purchased your flood insurance through NFIP, you may be eligible for a grandfather rule. This rule means the agreed policy price is locked and won't increase when transferred to a new homeowner, which could be a selling point. If you cancel your insurance, the next homeowner might have to pay a lot more.
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What about the future?
Climate change is accelerating natural hazards. scientists agree. Wildfires, hurricanes, storms and floods are more common and brutal each year.
In 2024,
Many homeowners insurance companies
Yogev Toby can be reached at
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Politico
6 days ago
- Politico
A new challenge for flood insurance
Presented by Editor's note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. QUICK FIX Devastating floods in Texas are exposing a growing problem that Congress may have to weigh when considering overhauling the National Flood Insurance Program. As extreme weather and flooding become more frequent in areas where homeowners don't typically hold federal flood insurance policies, policymakers could be forced to look at how to make the NFIP more attractive to non-coastal homeowners. However, this could tax the program even more as it nears its $30.4 billion debt ceiling. The floods in Texas and continued cleanup from the deluge in North Carolina have brought the issue front and center as Congress begins to figure out how to sustain a program that acts as the country's de facto risk management tool for flood events. Only about 2 percent of Kerr County, Texas, and 1.5 to 7 percent of surrounding counties, the main area impacted by the Texas flooding, are insured, leaving a large majority of the estimated 65,000 residential structures uncovered, according to data from the NFIP. 'It just exposes the flood insurance gap, and that we all need to continue to do a better job of making sure that people realize that floods can happen anywhere, and they do happen, they're devastating, and so insurance is one way you can help protect the financial future of your family or small business,' said David Maurstad, former senior executive of the NFIP under the Biden administration. NFIP provides 95 percent of all flood insurance policies in the country, but the program has been subject to a cycle of short-term reauthorizations by Congress. The next deadline is Sept. 30, marking the 34th reauthorization in eight years. Lawmakers have avoided tackling a long-term strategy to improve the NFIP, which is chronically in billions of dollars of debt to the Treasury and is being pushed closer to a breaking point with every new natural disaster. The aftermath of flooding in places outside of coastal areas prone to hurricanes may force policymakers to confront the new reality that could add even more pressure to the embattled program: If property owners in communities surrounding the areas impacted by the flood in Texas follow the typical trend, some may start looking to buy NFIP policies. But expanding access to the program won't be easy. One of the main barriers to flood insurance policies is people's willingness to pay the price. NFIP's new pricing model, Risk Rating 2.0, implements additional flood risk variables and 'is mandated by Congress to set rates that are actuarially sound to reflect each covered property's true flood risk and are fairly distributed based upon individual risk levels,' according to the program's website. The average NFIP premium is $786 per year, according to FEMA data from 2023. Risk Rating 2.0 has gotten some flak from lawmakers. In June, Sen. Bill Cassidy (R-La.) and nine other colleagues demanded an end to the policy. They said that NFIP premiums have increased in every state and 'by FEMA's own estimates, 77 percent of all NFIP policies now pay more than under the old system.' Congress has 'got to look at [NFIP], and they've got to incentivize it, or something else a little more so you can start to get more coverage across the country' not just in the traditional coastal areas, said Chris Steubing, executive director of the Texas Floodplain Management Association. 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Boston Globe
6 days ago
- Boston Globe
Floods come again. Is it time to get flood insurance?
First things first, what is flood insurance? Standard homeowner insurance generally covers water damage, but that's different from flood damage. Flood insurance is offered through a separate policy and specifically covers property damaged by a flood. What's the difference between water damage and flood damage? Advertisement Water damage can be as simple as a pipe leaking or a washing machine breaking and damaging belongings. A flood has a specific description, defined by the National Flood Insurance Program as 'a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties.' Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Do I need to get flood insurance? It depends. People who live in a designated floodplain face higher flood risk and should consider getting flood insurance -- if they don't have it already. The government has created an Even if your house is not within high-risk zones, you might be close to one. In that case, you might still want to get flood insurance. Advertisement In other cases, your house may not be near a high-risk flood zone, but it could still be at risk of flooding if, for example, it's at the bottom of a hill or a cul-de-sac. Again, you might consider flood insurance. How do I get flood insurance? Many homeowners insurance brokers offer flood insurance in a separate policy. If you can't find a reasonable private policy, the federally-run National Flood Insurance Program is an option. The federal insurance is usually cheaper than private policies, but has lower coverage limits. How much does it cost? The average flood insurance cost in Massachusetts is $1,142 per year from the NFIP program, according to the personal finance company, Properties located in flood zones but at higher elevations might qualify for reduced policy rates. You can request an elevation inspection through What about coverage? The downside to purchasing flood insurance through the NFIP is its coverage cap. The maximum building property coverage is $250,000 and content coverage of $100,000. Private insurers can offer a much higher coverage, but it comes with a cost. Motor vehicles are not covered by flood insurance, but auto policies with comprehensive insurance typically cover flood damage. I want to sell my property, should I cancel my flood insurance? Not yet! If you purchased your flood insurance through NFIP, you may be eligible for a grandfather rule. This rule means the agreed policy price is locked and won't increase when transferred to a new homeowner, which could be a selling point. If you cancel your insurance, the next homeowner might have to pay a lot more. Advertisement What about the future? Climate change is accelerating natural hazards. scientists agree. Wildfires, hurricanes, storms and floods are more common and brutal each year. In 2024, Many homeowners insurance companies Yogev Toby can be reached at
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