Flooding can be an emotionally and financially devastating event. With flood insurance, you're able to recover faster and more fully. Just 1 inch of water can cause $25,000 of damage to your home.
What impacts flood insurance policy costs?
A number of factors are considered when determining your annual flood insurance premium. These factors include:
- Flood risk (e.g., your flood zone)
- The type of coverage being purchased (e.g. building and contents coverage)
- The deductible and amount of building and contents coverage
- The location of your structure
- The design and age of your structure
- The location of your structure’s contents (e.g. Are your utilities elevated?)
Your property’s elevation
For properties in high-risk flood areas built after the first Federal Emergency Management Agency (FEMA) flood maps, the elevation of the building in relation to the base flood elevation is also a factor.
Understanding your policy terms
For detailed information about your flood insurance policy, review the FEMA Flood Insurance Manual or contact us today 302-422-8863.
For residential properties, you can secure coverage up to $250,000 for the building and $100,000 for the building contents.
For commercial properties, you can secure coverage up to $500,000 for the building and $500,000 for the building contents.
Contents and building coverage are purchased separately, and there are always separate deductibles. Unless you have contents coverage, your flood-damaged belongings are not covered.
Waiting periods for your coverage
Typically, there’s a 30-day waiting period from date of purchase until your flood insurance policy goes into effect.
Exceptions to the 30-day waiting period
No waiting period:
- If you purchase flood insurance while making, increasing, extending, or renewing your mortgage loan.
- If you change your flood insurance coverage on your insurance policy renewal bill.
- In the event of flooding after a wildfire, if a property is impacted by flooding on burned federal land and the policy is purchased within 60 days of the wildfire-containment date. Waiving of the waiting period is determined at the time of claim.
1-day waiting period:
- If a home or business is newly designated to be in the high-risk flood area and you purchase flood insurance within the 13-month period following a map update.
Policy term and expiration
NFIP flood insurance has a policy term of one year.
All policies expire at 12:01am on the last day of the effective term, but you remain covered for 30 days after the expiration.
Claims for losses that occur in this grace period will be honored, provided that the full renewal fee is paid by the end of the 30-day grace period.
Letting your policy lapse could cause you to lose any discounted rates you have been receiving, and you may not be in compliance with the terms of your mortgage agreement.
How can I pay less for flood insurance?
Your insurance premium is based on a number of factors but there are a few key actions you can take to pay less for flood insurance each year:
What you pay for National Flood Insurance Program (NFIP) flood insurance often has a lot to do with how much flood risk is associated with your property.
Mitigating your flood risk not only protects your property against flood damage but can also help lower insurance costs. For more information, check out the Homeowner's Guide to Retrofitting.
Common flood mitigation options include:
Choose a higher deductible.
Choosing a flood insurance deductible amount is an important decision.
Choosing a higher deductible will lower your premium, but it means you will need to cover more of the cost to rebuild out of pocket (or out of savings).
You may choose different deductibles for building and contents coverage, and the deductibles will apply separately to building and contents claims.
Increasing the deductible on your flood insurance policy to the $10,000 maximum could reduce your annual premium by up to 40 percent. However, using the maximum deductible might not be appropriate or allowable for everyone.
Check with your insurance agent to confirm your deductible coverage amounts and ensure you understand your specific risks and opportunities.
Provide an elevation certificate.
You can purchase, or your insurance company may require, an elevation certificate.
This certificate verifies your building’s elevation compared to the estimated height floodwaters will reach in a major flood in a high-risk flood area.
If your property meets elevation requirements you may receive cost savings.
Your community may receive a discount from the NFIP.
If your community is enrolled in the Community Rating System (CRS), you may receive a discount on your flood insurance.
The discount is calculated based on the community’s efforts to reduce the risk of flooding. If you have questions about the CRS, call your insurance agent or company.
You can also encourage your community officials to take part in the CRS.