Without a doubt, flooding can pose a big threat to residential and commercial properties, especially those located in the beachfront areas.
The Federal Emergency Management Agency (FEMA) has developed zone maps, which you can refer to if you’re planning to buy a house in a coastal location or any other area near a body of water. This is particularly important as these regions have a very high chance of experiencing floods once in a while.
If you have a property build in one of the zones that are prone to flooding, paying extra for a flood insurance policy is paramount. If you have enrolled for insurance premiums, FEMA will cater for all the damages that may result in case your property experiences flooding.
Is Flood Insurance Necessary For Beachfront Property Owners?
As beach houses are likely to suffer from flooding, every homeowner should seriously consider the security of their property. Getting a flood insurance policy can be very helpful and effective in such a case as you never know what the future holds.
Beachfront properties are located in areas that are flat, low lying, not forgetting that they are near water! The closer your house is to the body of water, the greater the risk of flooding.
Flash flooding can cause severe damages to a property, which will result in incurring a lot of financial losses. If you have a flood insurance policy for your beachfront property, then you will be protected in case of a flood. You will not need to worry too much about any significant financial loss that may result as the policy will cover all the losses.
In almost all cases, if you are willing to purchase a home in coastal areas, mortgage lenders will ask you to buy flood insurance. The powerful force of Mother Nature is unpredictable, and this calls for homeowners to take all the precautions required to ensure that the people living in those properties, and the building itself, are protected.
Types of Flood Insurance Policies and Their Coverage
There are two types of flood insurance that you might avail of, i.e. National Flood Insurance and Private Flood Insurance.
National Flood Insurance Program (NFIP)
Protecting your home from the floods caused by tropical storms, hurricanes, heavy rains or other natural disasters must be your priority if you live in a coastal area, which is considered a Special Flood Hazard Area (SFHA).
The National Flood Insurance Program was created in 1968 so that property owners can protect themselves financially. Thus, you will get flood insurance if you live in one of the thousands of communities across the US, which participate in the NFIP program. These communities must adopt and enforce flood management regulations according to the Federal Emergency Management Agency (FEMA) requirements to minimalize risks of flooding in a given locality.
The national flood insurance is managed by FEMA. The agency offers flood insurance by working directly with close to a hundred private insurance companies. NFIP rates don’t change depending on the insurance company or agent, as they are set.
What Does National Flood Insurance Actually Cover?
The NFIP policy covers direct physical losses, to the whole building as well as its contents (your belongings), that are caused by a flood. National flood insurance covers a wide range of problems, including water damages and destruction caused to a residence’s exterior and interior, for example, plumbing and electrical systems, permanently installed carpeting, furnaces, air conditioning, or water heaters.
All the assets that are kept in a house will fall under the contents coverage. These, among others, include clothing, personal belongings, furniture, air conditioning units, washing machines and driers, electronic equipment, kitchen equipment such as dishwashers or microwave ovens, or valuable items and antiques.
Private Flood Insurance Policy
Investing in private flood insurance protection is highly recommended if you live in a beachfront property.
You are allowed to claim money whenever you need it, even if a disaster is not declared by the US President. However, National Flood Insurance claims are paid by FEMA only after a disaster declaration by the President. Also, your disaster assistance funds will presumably be a loan that you will be obliged to repay with interest.
Getting a private flood insurance policy is also considered less expensive rather (usually a few hundred dollars), rather than relying on the State’s disaster assistance.
It will cover all that is protected by the NFIP. On top of this, any expense that one will incur at that period when the house is on repair will be under this type of insurance policy. Some of these costs include the costs of food and accommodation in hotels. In short, private flood insurance will cover everything else that national flood insurance will not.
Although the National Flood Insurance and private flood insurance will cover the building and the possessions, you should keep in mind that valuable documents, such as stock certificates, and money (on the off chance you keep paper money at home), will never be covered by the NFIP. There is always the additional safety net that is provided by private flood insurance, which is not offered by a basic National Flood Insurance policy.
With private flood insurance, you will be guaranteed that minor leaks as well as significant flooding will be covered. However, the specific coverage of flood insurance will depend on the type chosen by a beachfront home owner.
Without a question, it is beneficial for a beachfront property owner to get a separate flood insurance policy. It will not only protect their property in the event of a flood and give them peace of mind in keeping their possessions and family safe, but it is also going to increase the value of their house.
Is Flood Insurance Separate from Homeowners Insurance?
There is often confusion that arises among a majority of people, claiming that homeowners insurance is similar to flood insurance. Although they may be closely related, it is necessary to note that these are two separate insurance policies.
Not everything will be covered by homeowners insurance, for example, a standard homeowners insurance policy does not cover flooding.
Unless property owners get a special flood insurance rider, floods will not be included in home insurance policies. As homeowners policies typically don’t cover destruction caused by natural forces like floods, you are strongly encouraged to purchase additional coverage to fully protect your property in the event of a disaster.
Thus, it is obvious that having flood insurance is crucial if your property is situated in an area close to the beach.
V Flood Zones for Beachfront Properties
By definition, a flood zone is a geographical area that’s assessed according to the severity or type of flooding that frequents this area. These zones are specified on a Flood Insurance Rate Map or a Flood Hazard Boundary Map. Flood hazard areas included on the Flood Insurance Rate Maps are known as a Special Flood Hazard Area (SFHA).
SFHAs are divided into different flood zones, which have a high level of flood risk.
So, because all beachfront properties are in high-risk flood zones, their owners will be required to carry flood insurance.
V and VE flood zones, which are Special Flood Hazard Areas, belong to a category that is considered as being high risk. Purchasing a flood insurance policy will be mandatory in these zones. Most of the properties that are within 1500 feet in coastal areas fall under the V and VE zones. These zones have additional hazards related to storm waves.
As a buyer of a beachfront property, you should consider purchasing a private flood insurance policy as it ensures that you are relieved from flood disaster in case you fall victim. Flood insurance is a form of security for your home, your possessions, and your family. After all, you can still get a policy via National Flood Insurance.
If you are unsure about which flood insurance to purchase, it’s always good to approach a reputable and experienced insurance company so that you can be informed more about the best and most suitable policy to purchase.
Most insurance companies will sell flood insurance as a rider. This means that a homeowner has the freedom of selecting the kind of additional coverage that he may need and which will be appropriate for his property.
If you are not willing to purchase a flood insurance policy from an insurance company, you can always inquire in the office of Federal Emergency Management in your area about the NFIP and other options. Remember, the wrong choice of insurance can cost you a lot, and this is why seeking help from an insurance company is the best thing to do.