Homeowner's Insurance, Flooding, and alternate Flood Markets

Homeowner insurance protects your home and possessions from damage and loss. However, the peril of flood is not covered by the basic homeowner insurance policy. Flood insurance is a type of insurance policy usually backed by the federal government under the NFIP-the national flood insurance program and is designed in cooperation with the local community and private insurance companies.

If you live in a Special Flood Hazard Area (SFHA)and have a mortgage, you will be required by law to have flood insurance. If you live in a low-risk flooding area, it is not necessary to purchase flood insurance. However, for the ultimate in peace of mind, a preferred flood policy is available from NFIP at a substantial discount. It has been reported that nearly 25% of NFIP claims occur outside of high-risk flood areas.

There is an alternative web-based program available that offers, "primary layer insurance for the perils of landslides, floods, and earthquakes." The policies are being underwritten by Lloyds, which has a reputation of being one of the best in the business. This new product is available through select agents and brokers. However, not everyone will qualify for the program and the premium may not be better than NFIP.

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