Benefits Of Private Flood Insurance
There are a lot of advantages to private flood insurance. It is actually a younger industry within insurance. Flood insurance used to be primarily government run. As time has passed and flood zones are understood as well as coverage options, independent flood insurance has improved and grown to surpass the NFIP in multiple areas.
The Unknown Future Of NFIP Flood Insurance Coverage
Federal flood insurance rates have been in the news recently because they are likely going to be adjusted. Rate hikes are expected. According to yahoo news this is also aiming to discourage building within high flood risk areas. As their video depicts the rate hikes are connected to the expectation of higher flood risks which lead to higher flood damages. If you have flood insurance through the NFIP and are located in a flood zone this news might be giving you a lot of gray hairs.
At the end of the yahoo news video clip they point out that insurance companies are trying to get ahead of the information on weather to provide better and more accurate insurance services in connection to natural disasters and weather. The beginning of the clip pointed out that the NFIP has been utilizing flood zone data that is over 100 years old and while they are looking to fix this and raise rates, you should consider private flood insurance
Private Flood Insurance vs. NFIP
If you are looking for flood insurance you can either get flood insurance through FEMA, the government run flood insurance program, or through private flood insurance programs. Private flood insurance is independently run and organized. Due to that, there are more coverage options for your flood insurance policy.ย
Primary Benefits Of Private Flood Insurance
There are a lot of benefits to private flood insurance. The primary benefit of private flood insurance is the fact that they are not restricted by FEMA. They can provide higher coverage limits and some carriers can offer coverage on the contents of your basement.
- Coverage On Basement Contents: The NFIP does not include coverage for the contents of your basement. With private flood insurance you can get coverage for the contents of your basement.
- Higher Coverage Limits: Higher limits are available under private flood insurance. The NFIP has a maximum flood insurance coverage of $250k for dwelling and $100k for contents.
- Loss Of Use Coverage Is Offered: What is loss of use coverage? It is also referred to as Additional Living Expenses (ALE). This coverage helps pay additional costs that might occur from being displaced from your home. For instance rental payments or hotel costs can be covered with this type of insurance. This is only available when you purchase private flood insurance. Government provided flood insurance does not provideย
- Private Insurance Accepted By Lenders: Recently lenders have started accepting private insurance Has to be accepted by all lenders. This allows you to be compliant in having flood insurance that is not provided by the government. This is what finally allowed for private flood insurance to grow and surpass the NFIP. Many people were forced into buying government run flood insurance because of mortgage companies.
- Lower Premiums: In most cases private insurance has lower flood insurance premiums.
