One in five Californians is susceptible to floods each year. They account for nearly $580 billion in structural damage each year.
It goes without saying that California is vulnerable to flooding, which is why flood insurance has become such a big topic in recent years.
But what is flood insurance? How much does it cost and is it worth getting it in 2021?
Those are some of the questions we’ll be answering today. Read on to find out whether investing in California flood insurance is the right move for you.
What Is Flood Insurance?
Flood insurance is a type of property insurance that covers damages caused by floods, heavy rain, and other water-based disasters. Flood damage often isn’t covered by regular property insurance, which is why homeowners have to purchase specific policies.
This is especially true for residents in flood-prone areas. Flood insurance works just like any other insurance policy but covers destruction or damage caused by flooding and storms.
Users pay premiums based on their flood risk and the deductibles that they choose. When their property is damaged by flooding, they receive money to repair the damage or rebuild their home based on the limit.
Where Do I Get Flood Insurance?
Residents can purchase flood insurance in California from two sources: the National Flood Insurance Program and private insurance companies.
One is the National Flood Insurance Program, which is a government program ran by the Federal Emergency Management Agency (FEMA).
The NFIP offers flood insurance in participating communities, including ones in California. The actual policies are issued by private insurance companies, but FEMA provides resources and maps for which areas are most vulnerable.
How Much Does Flood Insurance Cost?
As with most insurance, the cost of your premiums will depend on your situation. Those living in flood-prone areas will no doubt pay more each year.
Factors like how close you are to the shore, home elevation, and the flood zone you’re in an increase or lower costs. The average annual cost of flood insurance in the U.S. is $699.
Depending on where you live in California, your cost might be much higher or a bit lower. So is it actually worth getting flood insurance?
Is Flood Insurance Worth It?
In some cases, you might not even have to consider this. Properties are often required to purchase flood insurance. Homeowners might not get a mortgage if they don’t.
Federal disaster aid can also be contingent on whether you have flood insurance. As such, getting it is generally a good idea for California residents.
NFIP issues a maximum coverage of $250,000 for building coverage and about $100,000 in content coverage. This should be enough for many.
However, you can look at other flood insurance coverage in your market for better deals.
Get the Right California Flood Insurance Policy Today
If you live near the water and your area is prone to flooding, getting insured has more benefits than drawbacks. While it can be expensive for some, shopping around for the right prices can optimize your budget.
Use this guide to help you decide where and how to look for California flood insurance today.
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