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Flood Insurance

Flood Insurance Information

    Floods pose a significant threat to homeowners in the United States, making them one of the most frequent and destructive natural disasters. Even an inch of floodwater can lead to catastrophic outcomes for your property and financial well-being. Just like any other valuable investment, it is crucial to safeguard your home from potential risks and vulnerabilities, including floods. To ensure adequate protection, flood insurance may be essential. 

    How Many Types of Flood Insurance Are There? 

    There are generally two types of flood insurance available: 

    1. National Flood Insurance Program (NFIP) policies—The NFIP is a federal program administered by the Federal Emergency Management Agency (FEMA). It offers flood insurance coverage for residential and commercial properties in participating communities across the United States. NFIP policies provide building coverage and contents coverage, which protect the structure of your property and its contents, respectively. 

    2. Private flood insurance policies—Besides the NFIP, private insurance companies offer flood insurance coverage. Private flood insurance policies may provide similar coverage as NFIP policies but often offer additional benefits and options. These policies are not limited to NFIP-participating communities and may provide higher coverage limits or more customized coverage options. Private flood insurance policies vary depending on the insurance provider. 

    It’s important to note that flood insurance coverage, whether through the NFIP or private insurers, typically has certain exclusions and limitations. Reviewing the specific policy details, terms and conditions when considering flood insurance is recommended. 

    How Much Flood Insurance Do I Need? 

    If flood insurance is a requirement, it is generally necessary to obtain sufficient coverage to rebuild your house in the event of its destruction, up to the maximum limit of your flood insurance policy, whichever amount is lower. Depending on your individual insurance requirements, it might be beneficial to consider purchasing additional coverage beyond the mandatory minimum. 

    Even if flood insurance is not mandatory, it is advisable to contemplate acquiring enough coverage to replace your belongings and rebuild your house in case of its destruction. 

    How Much Flood Insurance Do I Need for a Mortgage? 

    When purchasing a home with a mortgage, it is common for lenders to stipulate specific levels of homeowners insurance. However, it’s important to note that standard homeowners, condo owners and renters insurance policies typically do not encompass protection for floods. Consequently, certain lenders may mandate you to maintain minimum flood insurance coverage. These requirements can differ, but if your home is situated in an area with a high risk of flooding, it becomes more probable that your mortgage agreement will include a mandatory flood insurance provision. 

    How to Get a Flood Insurance Policy 

    If you live in Illinois and need a flood insurance policy, we’re here to help. Reach out to Oak Knoll Insurance today to get your flood insurance quote.