How Much Flood Insurance Do I Need?

Posted on by agentinsure

Did you know your standard home insurance doesn’t cover flood damage? Most homeowners don’t know this fact until it’s too late. However, The Policy Source in Austin, TX can help you learn more about the need for flood insurance before a flood strikes.

While investing in flood insurance is great, the other crucial point to observe is purchasing adequate coverage. If you don’t purchase sufficient coverage, you will incur considerable out-of-pocket expenses, negating the reason for investing in flood insurance in the first place. So, how much flood insurance should I purchase? It’s never a straightforward answer.

Comply with the requirements

Flood insurance isn’t mandatory in Texas, but your mortgage lender may require you to purchase flood insurance if you live in a flood zone. Always read your loan agreement to establish your lender’s requirements. However, you will have to realize that your lender requires you to buy flood insurance equivalent to the outstanding loan amount. Remember, this amount is just a minimum and might be insufficient when faced with severe flood damage.

How much insurance should I get for my dwelling?

As a rule of thumb, always assume the worst-case scenario when insuring your dwelling. Assume that a flood caused significant damage to your entire building. Would your current flood insurance cover the damage? If not, you should talk to your insurer to purchase a sufficient amount.

Always consider the replacement cost when insuring your home. This value ensures you don’t incur out-of-pocket expenses if the worst happens.

How much personal assets coverage should I purchase?

Like dwelling coverage, ensure your flood insurance can replace your entire assets in the worst-case scenario. However, to ensure everything in your home is covered, always maintain an updated inventory list with your insurer.

Still not sure how much flood insurance you should purchase? Don’t worry. We are here to help you. Please email or call The Policy Source in Austin, TX for personalized advice.