How Expensive is Flood Insurance?

Posted in Home Insurance

September 23rd, 2009

It’s difficult to think about buying flood insurance without also thinking about how expensive it might be.

In this tough economy, no one wants to spend extra money if they don’t have to, which means any way they can cut corners financially is a bonus.

The good news is that most who purchase flood insurance find that it fits relatively well in their budgets. But of course, it’s up to decide whether this is the case for you.

What Does Flood Insurance Cost?

Okay, so how much does flood insurance cost? On average, a homeowner might expect to pay in the ballpark of $700 – $800 annually. Of course, this cost can vary significantly depending a variety of conditions. So let’s take a look at what can affect the cost of this important insurance …

• Where you live. Unlike other types of policies that may look more specifically at your home value (though this is important too), the flood insurance policy considers whether your location is more prone to flooding than other areas. The higher the risk involved, the higher your premium is likely to be.
• The value of your belongings and property. As mentioned previously, your property value does matter when the insurance company prices your policy, but a lot of this depends on how much you want covered. Typically, it is required to insure the value of your remaining loan. However, it’s recommended to cover the home value, as well as the items in your home (keep receipts). The latter, of course, will increase your premium.
• When you buy coverage. Many people don’t know that flood insurance is often cheaper when you purchase it during a time when floods are least likely to happen (ex. winter). So do your research to try to secure a policy during a cheaper time frame.

If you live in an area that is prone to flooding, you don’t want to bypass flood insurance. However, if you seek good rates on insurance policies, you might secure the right one for your wallet.