Homeowners can purchase private coverage to add to their federal flooding policies or purchase an entirely private policy. Private coverage is provided by independent companies including Lloyd’s of London, TypTap and Aon Edge. It often offers much higher coverage limits, as well as extra benefits such as “loss of use” which pays for your accommodation if your home is uninhabitable. Private insurers, however, do not need to provide coverage if they consider your property too risky. And they may refuse to renew their policy if their property is, in fact, damaged by a flood.
Unlike federal flood policies, private policies typically do not include a second home surcharge that can greatly increase the annual premium.
Braley cited what he described as an “extreme” example: a small historic home in Oak Bluffs on Martha’s Vineyard qualifying for a $1,700-a-year private policy, compared to $11,800 for a federal policy.
It’s worth getting a quote for private coverage to compare with federal coverage to see which works best for you, said Amy Bach, executive director of United Policyholders, a consumer protection agency.
Here are some questions and answers about flood insurance:
Do I need flood insurance?
If you have property in a high-risk area, your mortgage lender will likely require you to take out flood insurance. You may want to buy coverage, however, even if your home is in an area that traditionally hasn’t had flooding. A quarter of flood complaints come from properties outside of high-risk areas, according to FEMA, but most property owners in those areas are entitled to lower rates.
Because of climate change, it’s not just properties near the coast that are at risk from flooding, Bach said. Homes in the interior can be flooded by heavy rains, and properties near mountainous areas devastated by forest fires can erode, causing damage from flooding.
“Don’t think that if your area didn’t flood before, it won’t now,” she said. “We are in a new era.”
According to FEMA, an inch of water can cause $25,000 in damage.