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Questions When Comparing Coverage

When discovering home and flood insurance for a residence, comparing private coverage against the National Flood Insurance Program (NFIP), which is federally backed insurance coverage, is important to ensure the appropriate amount of coverage is obtained. Questions that need to be asked include what annual premiums are appropriate for the residential customer seeking coverage. This is an important question, but not the most important. Lower premiums mean lower limits in coverage and also include higher deductibles.

Deductibles for home and flood insurance through the NFIP total $20,000. This is a substantial amount of cash for a residential property owner to come up with following flood damage to their residence. This amount includes a $10,000 deductible to cover the residential building and a $10,000 deductible to cover personal property. However the max coverage for the building is $250,000 with an additional $100,000 as coverage for personal property. When substantial damage occurs from a flood, these limits can be reached very quickly. When comparing private coverage to federal coverage, it is critical to consider the costs that would incur if maximum damage occurs to the residence. How many out of pocket expenses would come about and how much each residential property owner could realistically afford are important considerations to make when comparing coverage.