● Ask your insurance agent to see if you are in a floodplain. Or, if you prefer, go to www.floodsmart.gov and select “What’s Your Flood Risk?” which will ask you to enter your home address. This Web site will then specify whether you are in a low, moderate, or high risk area.
● Consider purchasing flood insurance even if you are in a low-to moderate-risk community. In these areas, you may be eligible for the Preferred Risk Policy, with premiums as low as $112 per year including coverage for your personal property.
● Note that a flood policy does not take effect until 30 days after you purchase the coverage. Thus, if the local meteorologist announces a flood alert for your community and you try to purchase coverage, it is already too late.
● The maximum limit of insurance in the NFIP for your home itself is $250,000. If your residence’s value exceeds this amount, ask your insurance agent about excess insurance for losses above the federal policy’s maximum limits.
● Don’t assume that the government will bail you out if you suffer a flood loss and don’t have a flood insurance policy. That decision is a gamble you may not win. Remember that federal disaster assistance, if available, is usually a loan that must be paid back with interest.
● Discuss all the pros and cons of flood insurance with your agent before making your final decision.
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Copyright 2008, International Risk Management Institute, Inc.