|
Flood Insurance
About Preferred Risk Flood Insurance Policy
Today, it is better for most people to buy flood insurance as many areas have been recently affected by hurricanes and storms. However, not all areas are considered to be severely prone to flooding. Areas which have a lower chance of flooding are classified as B, C and X Zones. These are low-to moderate-risk areas in which flooding can happen but the chances are much lower compared to other areas which can easily get flooded.
As a home owner if your home is in a low- to moderate-risk area you can take up a preferred risk flood insurance policy as this will help you to lower your insurance costs. This policy is a low-cost protection option for owners of residential and non-residential properties.
The policy will provide coverage for the building and its contents or just the contents alone. This means that renters can take up this insurance for their home contents. Several combinations are available. For example taking $20,000 coverage for building and $8,000 contents coverage can cost only $112 per year. As a renter taking the $8,000 contents coverage will suffice and this comes down to $39 per year.
Since this policy is available to business owners as well, they stand to gain by the low cost involved. For example, a business owner who takes $50,000 coverage for building and $50,000 for contents coverage will incur only $500 per year towards their cost for flood insurance. If the place is leased out, the contents of the premises can be insured for $50,000 and this will cost only $112 per year.
If you intend to take up preferred risk flood insurance, your property must be located in the B, C, or X zone on the effective date of the policy. At the time of renewal, the insurance of the property will be based on the then current flood status. This means changes in the flood area maps will determine further eligibility for preferred risk flood insurance.
Preferred risk flood insurance policy is the preferred option by many people who live in low-to moderate-risk areas as it offers low premium insurance rates. It is not only cost-effective; it also provides several options on the various combinations that can be taken up for building and content protection.
|
