Flood insurance is a type of policy that covers the physical damages to personal property caused by an extreme weather event which results in flooding. This type of insurance is not as often purchased as other kinds of insurance as only about 20% of properties within the US are at actual risk of flooding.
Flood Insurance, though, is available for anyone who wants the extra added protection and peace of mind it can provide. Those who live in low-lying areas and in flood plains certainly need it more than those who live on higher ground and certain localities that are more prone to flooding do actually require this insurance by law. To see if you live in such an area, go to the FEMA website to view their topographical maps where regions are highlighted that have a more likelihood of flooding. You may also contact your local city hall for more information on the subject.
Flood insurance will cover homes and properties affected by "direct physical damage" that is the result of a flood event. If there comes a day in which you need to file a claim, the process is like that in any other kind of insurance- an adjuster will visit your property to investigate and confirm that everything you claim is in accordance with what he or she sees at the location. The property owner is then obliged to provide a "proof of loss" form to the insurance company within a two-month period. Most of this kind of insurance is paid via a single premium on a yearly basis, though some choose smaller monthly payments in order to make the process more affordable.
Coverage is divided into several categories. The insurance mostly covers the homes structure itself with an option to take out a separate policy to cover the value of personal items within the walls of the home. Another kind of coverage provides protection against the loss within homes with basements, while a different policy would be purchased by those who do not have a basement.
The peace of mind that comes with a flood insurance policy is surely the biggest benefit of all. Knowing that in the event of a flood your home and belongings are covered is surely priceless. The annual premium costs an average of around $600, while the typical cost of damages from a normal flood event far exceeds $25k! This would seem to be a no-brainer for those who live in areas that could be affected by such an event. Flood insurance protects your hard-won investments and could indeed help you to sleep at night!