How to Buy the Cheapest Flood Insurance

If you live in a flood prone area, you must have considered buying flood insurance. If a flood ravages your home, the financial costs for replacing it can be backbreaking. Buying flood insurance may not be the best option if you do not have a homeowner’s policy. Ideally, flood insurance is an additional policy, over and above a homeowner’s policy, which you should have to protect against potential flooding. Assess your needs. Evaluate your assets and buy the cheapest flood insurance available in your state.

Difficulty: Moderate

Instructions

1. Check the state agency where you live. Some states have a mandatory requirement to buy flood insurance if you live in a flood prone area. Such states provide flood insurance policies which are often the cheapest.

2. Inquire about the Preferred Risk Policy. It is one of the cheapest known flood plans you can get. The name of the policy may vary depending on the state you live in.

3. Learn about the National Flood Insurance Program--a federal initiative for disaster mitigation.

4. Make a list of valuables and belongings in your home. If you rent a home, consider buying flood insurance for your personal belongings. If you are a homeowner, you may not qualify for a mortgage loan without buying flood insurance if your home is situated in flood prone areas.

5. Contact the state agency and request quotes.

6. Get competitive quotes from private insurance companies.

7. Compare quotes for price, coverage and limits.

8. Seek advice from an agent. Choose coverage wisely for the cheapest flood insurance.

Tips & Warnings

• Visit the National Flood Insurance Program Web site (see Resources below). It has some valuable information on understanding and buying cheap flood insurance.
• The flood zones are divided into high, medium and low risk zones. If you live in a high risk flood zone, you may not qualify to get a cheap coverage.
• FEMA offers flood insurance at affordable costs (see their Web site address in Resources below).
• When buying insurance from a private carrier, ensure that the company is listed as an authorized insurance carrier to sell flood insurance under the NFIP.