Flood and earthquake insurance are known as “single peril” insurance, which means they are sold separately from homeowner’s insurance.
Flood insurance protects against losses to structures and their contents, not the land surrounding them. The coverage applies whether the flooding results from heavy or prolonged rains, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure, or other natural causes. To be considered a flood, the water must cover at least two acres of normally dry land or affect at least two properties.
Flood insurance is available both within and outside of flood plains. Different types of policies are available depending on your flood risk, which is determined by your property’s location on your community’s flood map.
You will need to get flood insurance if you live in a designated flood zone, as most mortgage lenders require that you have such a policy before they will approve your loan.
If your area qualifies, you can purchase flood insurance under the National Flood Insurance Program, which is a government program enabling property owners in participating communities to purchase insurance protection against losses from flooding.
For you to qualify, your community must have agreed to stricter zoning and building measures due to high flooding possibilities. You can get replacement coverage for the structure of your home but only cash value for your possessions and no coverage for the cost of living while you are out of your home.
The prices for flood insurance—sold and serviced by private insurers and backed by the federal government—run the same, since the rates are set by the National Flood Insurance Program.
Also consider buying flood insurance if your house could be flooded by melting snow, an overflowing creek, or water running down a steep hill.Be aware that it takes 30 days for a flood policy to take effect, so purchase it well before the signs of an imminent disaster.
Earthquake coverage can be a separate policy or an endorsement to your homeowner’s or renter’s policy. In California, it is available from the California Earthquake Authority, and, in such earthquake-prone states as California, it usually comes with a high deductible—usually 10 percent or more.
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