Usually, homeowners are of the belief that their homeowner insurance policy provides them protection against flood related damages as well. This is not the case. Insurance against flood related damages is provided by a different agency called the National Flood Insurance program, which is a part of the Federal Emergency Management Agency.
Premiums for flood insurance are calculated according to the location of the home vis a vis the flood plain. Usually, the flood plain is divided into three zones. Zone A carries the highest premium and is usually very expensive. Homes located in the flood plain, fall in Zone A. Zone B and Zone C are located away from the flood plain, with Zone C being termed as the ‘preferred flood program’. It carries the lowest premium.
It has also been observed that most people insure their homes against floods only to the loan value and do not take into consideration the replacement value. Only after the damage is done do they realize this fact, but it is too late by then. Experts recommend that homeowners must take into account replacement costs as well before buying flood insurance.
Your Comments
yes i do agree to your post comment that many shopping for home owners insurance are simply purchasing it with out checking the coverage present in it. since they don't aware that not all the home owners insurance cover flood and earthquake insurance when they suffer only they will come to know it. but it too late for them to realise. so its better to approach insurance agent to get all the particular details and coverage(its needed for all the home owners to take earthquake and flood insurance).
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