Now that you have decided that flood insurance is a necessity, what do you do next? The most obvious place to start is with your home insurance company or personal agent. Not all companies are directly permitted to write a flood insurance policy. In fact, the insurance companies do not actually underwrite the policy. The policies come from The National Flood Insurance Program (NFIP), the federally created program. Insurance companies that are approved to write policies for the NFIP are called "Write Your Own" (WYO) insurers. They write the policies, bill their clients, collect the premiums and manage the loss adjustment on behalf of the federal government.
Insurance companies that are not WYO insurers may write a policy directly from the federal government, they may contact another agency that is a WYO insurer or they may redirect their clients altogether to another organization for assistance in purchasing a flood insurance policy. Regardless of how you obtain your information, direct from your own insurance company or from a referred source, one of them will provide the initial quote. Technically, no matter where you request the quote, it should be the same amount, all things being equal. The federal government actually sells the insurance and pays the insurance company a fee so rates would be the same regardless of company. But rates would change depending on the deductible amount, the mortgaged amount, the replacement cost and other variables that may change per home. In order to see the pricing, one may check online at the official website. Although this article does not seek to recommend one WYO over another, not really knowing any company's competencies, one company in business since 1984, claims to service hundreds of agents and allows individuals to seek quotes directly online from their website. They do tell the public that the rates are set by the NFIP and are the same regardless of from whom the quote comes. When obtaining quotes, be careful of companies either on the telephone or on the internet who say they can get the insurance cheaper or make claims that are contrary to generally published material on flood insurance. Flood insurance is not the same as calling for quotes for regular home insurance or auto insurance. You just do not ring up five or ten companies and decide upon a rate to choose. The NFIP has set a limit of $250,000 on homes and $100,000 on personal contents so if a home is worth considerably more, there are now insurance companies that offer Excess Flood Protection. To obtain quotes for Excess Flood Protection, you would first need to know which companies offer the specialized insurance. Again your own insurance agent may recommend a qualified company or may even call on your behalf to get your quote if they have an agreement in place with a particular firm. Flood insurance is a purchase that you must understand. Before purchasing a policy in addition to the NFIP policy, ensure that you need a policy that offers more protection and know exactly what you will get if a flood claim is placed on the policy. Compare the results with NFIP alone and then with both the NFIP and the Excess Flood Program to ensure you understand the exact payouts in the event of a flood.
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Live in Texas and wonder if you should buy flood insurance? Well think about this statistic and you are bound to have your answer. Texas is near the top of the chart when it comes to damage created by weather-related activities. The greatest portion of the damage is directly attributable to floods. And if you are still not sure whether you require flood insurance, you may not have any choice in the matter if your home is mortgaged. Depending on the amount of a mortgage, especially in instances where the bank or mortgage company owns the majority dollar value of the home, it may require flood insurance as a condition of the loan. Further, if the home is in an area with a propensity to flood either known by historical data or environmental changes to the area, the bank will indeed require insurance. Many areas are designated as floodplains or flood zones. The NFIP and FEMA keep maps which indicate areas where flooding is probable. Banks and mortgage companies will review these maps to determine whether your home is located in or near the area and will make a decision. Disagreeing with their decision will hardly help you, as you will walk away with no loan. For people who have existing loans and receive a notice to purchase flood insurance, it will be difficult, if not impossible to fight. As long as the bank carries the mortgage, it will make the decisions under which you will keep that mortgage. Further, if the maps showing flood plains have changed and your property is now affected, their decision may be well founded and indeed prudent. In addition, if you live in an area that has previously flooded and you subsequently apply and receive assistance, then flood insurance is mandatory for as long as you live in the same home. If you choose not to buy flood insurance after having been helped, then you will never be able to receive assistance again. This actually applies to all states and not just Texas. And if you are not forced or required to buy flood insurance as a condition of your mortgage or previous assistance status, then the questions remains "should you buy insurance of your own free will?" We have compiled a few facts to help you make that decision.
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