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Flood Insurance

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Flood Insurance

There are many risks that people are accustomed to insuring against. These will include, health insurance, auto insurance and fire insurance. There are others that are less familiar, such as dental and flood insurance but there are many reasons why you should reassess the insurances you currently have in place and perhaps consider relocating them to cover the risks that you are most afraid of experiencing.

For example, did you know that losses due to floods are thirty times more likely to occur than fire losses? This is especially true if your home is located in a flood prone zone. While flood loss is generally less devastating than fire loss, if your home is located in a flood prone zone, the chance of even experiencing catastrophic damage is still 25% greater from flood than from fire.

Flood loss

Most basic home insurance policies do not automatically include flood loss as st andard. Commercial property policies are the same, with flood loss only being covered if it is specifically mentioned in the policy. If the flood is extremely severe, it may be classified as a disaster site by the federal government. This will cause some protection to be made available in the form of loans. These loans, which come through the Federal Emergency Management Assistance program, are not like insurance however, as you are required to pay back the loan that they give you, as well as any other home loans you already have. They will also require you to carry flood insurance in the future. The other thing about the Federal Emergency Management Assistance program is that it only kicks in if your area and flood are declared a federal disaster site. This can be fairly rare when compared to the amount of floods that are experienced annually.

Flood insurance will be offered by various insurance companies but should be backed by the National Flood Insurance Program. This type of coverage, which is supported and regulated by the federal government, is the only type of flood insurance that will fully protect your home and contents from rising water flood insurance.

Shop Around

If you are considering taking out a policy of this kind, shop around for the best rate and find out what is covered and what is excluded. It may be that a specific company’s exclusion is exactly the situation in which you require coverage and other companies may not have the same exclusion so you are wise to shop around. Also, all insurance companies vary in what they offer and what they charge. Do not accept the first offer or quote you receive and do not expect all companies to provide the same deals. You should always shop around when it comes to insurance and find yourself the best deal available.

Financial planning and insurance

There are many vital parts of our financial plan: estate planning, mortgages, credit cards, and UK Secured Loans. One area you need to include is insurance. Insurance answers the question, “what if something bad happens?” No one likes to think about and too many people avoid the topic of insurance because they fail to see the benefit.

But there is a benefit! With insurance, you will have peace of mind that their loved ones will be taken care of if they die. So why are you reading about insurance on a site that has to do with loans? Simple. You may want to consider insurance to cover your loans so that if you were to pass away, your loved ones will not be saddled with unexpected debt.

And, if you have a secured loan that your loved ones cannot cover, you do not want your assets seized to cover the loan. That will add tragedy to tragedy for your loved ones!

So how do you know what kind of insurance to get to cover your loans? Or any expenses at all, for that matter? The easiest thing to do is to determine the length of time that a particular expense will be present in your life and get insurance that matches the term of the expense.

For example, any death or estate tax will always be present in your life because no matter when you pass away, those expenses will be incurred. Also, if you want to bequeath a gift to a charitable organization, you will likely always want to have that as an available gift to make.

However, for many other expenses, including your loans, a temporary solution is better. For example the mortgage on your house or the loan on your car are both excellent loans to create insurance for. This way, if you were to pass away while these expenses are still present, they will be automatically paid off at your death. And because you are matching the term of the loan to the term of the insurance, you are only buying insurance for as long as you have the loan.

For example, say you have a secured home improvement loan to last for three years while you build an addition onto your home. At the same time you take out a three year term insurance policy for the same amount as the loan.

If you were to pass away in the second year, the insurance would pay your loved ones the full amount of the loan, of which they can use two thirds of it to pay the remaining portion that is still outst anding on your loan.

People do this for many kinds of loans, including their mortgage, their automobile loans, and any other kind of loan they have. It’s an excellent way to ensure that your loved ones are not going to be saddled with debt if tragedy should strike.