There is an increasing hype about the private flood insurance policies these days but consumers have to make sure they are well informed before choosing one policy over the national federal policy. Florida, a state which is so vulnerable to floods after every span of time is very much active in offering flood insurance. The flood insurance is a necessity while living in Florida. In Florida homeowner insurance doesn’t cover damages caused by the flood. To seek protection against flood, consumers need to buy individual coverage. One primary source of flood insurance is the National Flood Insurance Program which is administered by Federal Emergency Management Agency. Back in 1968 when it was difficult for private companies to provide coverage for flood risk so at that time this program was created to cater the growing needs of flood safety. Unfortunately, after the two disastrous hurricanes in 2005 and 2012, the federal program has been drowned in the pool of debts. The government, on the other hand, is trying to take the initiative to bring stability in the program and raise the flood policy rates. According to insurers, updated technology and building practices can assist them to understand. Consumers should ask insurers and take their advice regarding private plans and where they stand against the national flood insurance policies.
People should ask some questions of themselves while taking advice from insurers. Firstly, they should ensure whether the insurer is financially sound. It is very much wise to know whether policy insurers have guaranty funds or not. Secondly, policy seekers should also be aware if the insurance company has the same waiting period as that of national flood insurance. There might be some personal insurance flood companies that might have their lead time less than 30 days which could be very beneficial for the policyholders.
The national flood insurance program has the potential to cover structures that cost nearly $ 250,000 and also contents up to $100,000. One thing to acknowledge here is that National Flood Insurance doesn’t cover the surplus living costs or in other words extra wants of the people. In contrast, private insurance companies could offer something more to their customers like higher limits. They even provide coverage to your house even if you have shifted temporarily to another place.
Flood policies are gigantic in scale, and private plans are just a part of it. Individual policies are a small portion of flood policies. Florida, which has the largest proportion of properties with federal flood insurance — about 1.8 million of the roughly 5.1 million policies nationally — acted in 2014 to encourage the sale of private systems. The state’s Office of Insurance Regulation estimates there are now 3,000 private flood policies.
There is a growing competition between National and private insurance firms which are indeed beneficial for the people because to gain more customers they are coming up with better and better packages.