How to Get the Best Flood Insurance

If you live near a body of water and have a mortgage, you are almost certainly required to have flood insurance. However, as sea levels rise, even homeowners in moderately risky flood zones should consider purchasing flood insurance. Finding the right policy is not always simple. This article will explain how to get the best flood insurance policy for yourself.

Who Has the Best Flood Insurance?

The Federal Emergency Management Administration (FEMA) manages the majority of flood insurance policies in the United States as part of the National Flood Insurance Program (NFIP), and private insurers sell them.

This means that if you purchase an NFIP-backed flood insurance policy, your annual premiums and coverage levels will be the same regardless of the company from which you purchase it.

Customer service and coverage limits are important factors in determining the best flood insurance.

Best flood insurance company based on customer service

Based on the high ratings they received from customers in the 2016 J.D. Power study of homeowners insurance companies, we recommend Amica, USAA, and Encompass as three top flood insurers.

This is especially critical given the nature of flood insurance claims. The majority of claims are filed following major large-scale floods, and insurers only have a limited number of adjusters. Having an insurer with a proven track record of keeping their clients happy and informed can help to alleviate the stress of dealing with a flood. Amica, USAA, and Encompass all rank in the top three for client service and home claims, and we expect the same for flood claims.

USAA membership is restricted to qualified military personnel and their immediate family members. Most of the company's insurance products have favorable ratings. Amica and Encompass are available to anyone, but not in every state. If they are not available, Liberty Mutual is the third best option among the top companies available in your area.

Best flood insurance for coverage

Private insurance companies are better options for the best flood insurance coverage if you want higher limits than what is available in standard NFIP-backed policies. NFIP claims are typically capped at $250,000, with higher limits available only to homes in the highest risk categories. They also do not cover additional living expenses if you are displaced as a result of a flood. If you live in a low-risk area and want higher limits, you must go through a private flood insurance company, of which there aren't many.

The Flood Insurance Agency is currently your best bet for private flood insurance. The Flood Insurance Agency, which is supported by Lloyd's of London and others, provides policies in all 50 states. You have a few more options if you live in California or Florida, including:

• The Flood Insurance Agency
• Golden Bear: (only available in California)
• TypTap: (only available in Florida)

Choosing private vs. NFIP flood insurance

Here is a quick summary of the pros and cons to going with a private insurer:

Another thing to keep in mind is that, unlike NFIP policies, private flood insurers can cancel your policy if your flood risk becomes too high. Furthermore, if you try to re-enroll in NFIP coverage, you may discover that your premiums have skyrocketed due to increased flood risk in your area: you would no longer be "grandfathered" into whatever zone your home was originally placed in.

That is, if your home is now in a more dangerous zone, you must pay the current rates for that zone rather than your initial rate. Finally, keep in mind that your mortgage lender, particularly if it is a federal loan, may not recognize your policy with a private company.

How do you buy flood insurance?

You can purchase flood insurance by speaking with and receiving a quote from a flood insurance agent who can write NFIP policies. Flood insurance cannot be purchased online in the same way that car or homeowners insurance can. The Flood Insurance Agency provides estimated quotes for private flood insurance on their website, but you must submit a separate application to actually purchase a policy.

• There are currently 79 insurers working with the NFIP. Customers of State Farm should be aware that the company recently ended its partnership with NFIP. If you already have a State Farm policy for another type of insurance and would prefer not to go through another company for flood insurance, you can go directly to the NFIP.

Do you need flood insurance?

If your home is in a moderate to high-risk flood zone, you should get flood insurance. To be more specific, if you live in a "V" or "A" zone (Special Flood Hazard Areas (SFHA)), which FEMA considers to be "very high risk" for flooding, you should have flood insurance. You can search your area's flood map here to see if you live in a high risk zone. You can use the table below to determine whether you should get flood insurance:

There is no doubt that sea levels are rising, and lands that were not prone to flooding a decade ago may now be vulnerable, and even more so in the future.

Also, keep in mind that your standard homeowners insurance policy will not cover damage caused by a natural flood. If you believe your home will be flooded in the next decade, consider that one inch of flood water can cause $10,000 in damage, the average flood insurance claim is $30,000, and 20% of all claims come from "moderate to low risk" zones.

How much does flood insurance cost?

Flood insurance can range from $400 per year for low-risk homes to more than $13,000 per year for high-risk homes. It all depends on how high your house is and how far it is from the coast. We obtained some quotes from the Flood Insurance Agency's website for different types of homes facing varying risk for $250,000 of building coverage and $100,000 of contents coverage with a $2,000 deductible to get a rough idea of what some plans might cost.

*for a policy with a $1,250 deductible

If you live in a "V" zone, it is obvious that you will need to pay a significant amount of money for flood insurance each year. We recommend comparing flood insurance quotes from both private and NFIP-backed programs.

The NFIP may be able to obtain discounts that are not available through a private insurer, making them less expensive. You can also raise your deductible in order to lower your premium. In a "V" zone, increasing your deductible to $5,000 (from $2,000) saves you around $1,000 per year. Your premium will also vary depending on where you live.

The following factors will also influence the cost of flood insurance.

• Your home's age
• Your home's construction materials
• Whether you have a basement
• The number of floors your home has