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How to Choose a Flood Insurance Company: Everything You Need to Know

Flood Insurance Company

Did you know that 90 percent of homeowners in the United States of America do not have a flood insurance policy? Exploring options for insurance companies when it comes to flood coverage might not be high on your priority list, but many people make the mistake of thinking that their homes are immune to flooding.

A flood insurance policy is a great way to allow yourself to rest easy rather than lose sleep over the potential water damage that a flood will cause at your home. It makes a ton of sense to choose a flood insurance company that will keep you covered when the worst happens.

The good news is that you’ve found the right guide to learning more about finding the right flood insurance company. Keep reading to learn more today!

Understand the Wait Period

One thing that many homeowners don’t realize when it comes to flood insurance is that there is a wait time. There are three different wait periods that you need to consider when you’re exploring your options for flood insurance coverage. Loan closings are the first of these wait periods.

Loan closings occur when a property that you wish to purchase requires flood insurance before the deal goes through. If you go with this option then you won’t need to worry about a long waiting period. Your new home could flood a few days after you close on it and you’d get flood insurance coverage.

Newly mapped policies are another waiting period to consider. This happens when the area in which you live gets re-mapped and it is determined that you need flood insurance. You’ll face a one-day waiting period if your policy is affected by re-mapping. You can see more details for comparing insurance costs and insurance terms and conditions.

You should also think about the standard wait period, which is 30 days. This means that you could invest in a flood insurance policy today but it will not go into effect for another 30 days. If a flood happens at your home before the 30-day mark then you’re out of luck.

Think About Deductibles

You also need to think about the deductibles when you’re looking at options for insurance companies. Many homeowners make the mistake of thinking that flood insurance deductibles work in the same way that home insurance deductibles do. You could face three different deductibles if your home ends up flooding.

Keep in mind that your deductible could play a big role in determining what our premium is for your flood insurance. The three deductibles are building coverage, contents coverage, and additional living expenses.

The deductibles could be different depending on who you choose when you choose a flood insurance company. The deductibles through the National Flood Insurance Program could be different than the ones offered through a private insurance company.

The coverage for your additional living expenses is only offered by private insurance companies. Don’t forget that when you start exploring options for insurance companies.

Will the Bank Accept Your Flood Insurance Policy?

If you’re financing your current home then you also need to think about whether your bank will accept the policy. You will encounter a number of reasons why they might decline your flood insurance. The type of policy will have a big impact on determining whether it gets approved or not.

It’s also possible for the bank to decline your flood insurance policy on the basis of having too much coverage. One thing to remember if you’re shopping for a policy is the type of loan you used to purchase your home. FHA loans will not allow you to use a private insurance company for flood insurance.

This puts a big financial strain on new homeowners since the premium could quadruple on them if they can’t use a private insurance company. Always let your flood insurance options know the type of loan that you used when purchasing your home or property.

Know the Differences: Private Flood Insurance vs. NFIP

When you start exploring your options for flood insurance companies, always choose an insurance company that has access to NFIP policies as well as private flood insurance policies. A big difference between the two options is the ways in which flood zones get viewed.

It may sound counterintuitive, but flood zones tend to have a much smaller impact on your premium than you’d think. The flood risk score and the overall flood risks are both factors that are used when determining what you’ll pay for flood insurance.

The pricing is another major difference that you shouldn’t ignore. If you live in a high-risk flood zone then you will pay significantly less with private flood insurance. You also won’t face a surcharge if the property that you’re insuring isn’t your primary residence.

Read the Online Reviews

Reading online reviews is one of the most effective ways to explore options for insurance companies. You can learn more about the experiences that other customers had when working with your favorite options. You will also have an easier time comparing insurance costs when you take the time to read reviews about different flood insurance companies.

Google is a great place to get started if you’re trying to start a list of options for flood insurance. You can check out the reviews on Google to see how the insurance company responds to negative reviews. 

Taking the time to read online reviews will make it much easier to eliminate companies that don’t provide the best service. It’s a surefire way to find the best flood insurance policy for your home.

Now You’re Ready to Choose a Flood Insurance Company

If you’re getting ready to purchase a new home then it makes a lot of sense to choose a flood insurance company for peace of mind. Make sure that you understand the waiting period, and look over the insurance terms and conditions. Most of all set some time aside for reading online reviews to narrow down all of your options.

Check out the rest of our blog page if you’re craving more thoughtful and beneficial articles like this!

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