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Flood Insurance FAQs

Flood Insurance FAQs

Most insurance policies can be purchased through private insurers. Flood insurance, however, can usually only be obtained through the National Flood Insurance Program (NFIP). This government program has rules and regulations that are different from private insurance, and these differences can cause frustration and confusion for consumers looking for flood insurance. Below are some frequently asked questions about flood insurance and their answers. Why can’t I buy flood insurance RIGHT NOW? Flood insurance is one of those policies that people don’t think they need until they do. The storm of the century is bearing down or the levy is about to break, and those without flood insurance want to purchase it right away. Insurance is meant to mitigate accidental risk, those things that cannot be foreseen. With a flood bearing down, it is not in the best financial interest of the flood insurance carrier to sell a policy that might pay out face value before the premium check even clears the bank. NFIP has a 30-day mandatory waiting period on all new flood policies, meaning the policy goes into effect 30 days after the purchase date. They do allow for policies with no waiting period, but only in the event of a loan closing where the mortgagee or bank requires flood coverage. Buy flood insurance before you need it, so if you ever need it, it will be there for you. Why is flood insurance so expensive? The price of flood insurance depends on many factors: Your proximity to waters that may be subject to flooding (oceans, gulfs, bays or rivers). The height above sea-level where your home or...