How Much Flood Insurance Do I Need?

Flood insurance is a must-have investment if you own a business or home in Opelika, AL. Given that floods can strike anywhere and that typical insurance plans don’t cover flood damage, investing in flood insurance from Elliott & Associates Insurance is a no-brainer. But how much flood insurance do you need? Here is a comprehensive guide.

Meet the lender requirements

While flood insurance isn’t mandatory in Alabama, mortgage lenders may require you to invest in flood insurance, especially if you live in a high-risk flood zone. Your lender will dictate the amount of flood insurance you should invest in. Usually, the amount required by lenders is equivalent to the outstanding loan liability.

Adhering to the lender’s requirement is superb, but that doesn’t mean you stop there. Remember, your lender wants to safeguard their interests that usually don’t align with yours. So, stick your neck out to increase your flood insurance coverage to cover your current financial needs.

How much flood insurance coverage is sufficient?

Flood insurance covers your dwelling and the contents inside. As a rule of thumb, invest in flood insurance to replace your assets in the worst-case scenario. When purchasing insurance, consider the "replacement cost value" to ensure your house and contents are replaced to the last cent when the unthinkable occurs.

Pro-tip: When you purchase flood insurance from the National Flood Insurance Program (NFIP), the dwelling coverage is limited to $250,000, while the limit for the contents is $100,000. If you need higher coverage than this, private flood insurance is the best way to go. Private carriers provide higher coverage and even offer "additional living expenses" coverage when floods render your dwelling unlivable.

Need to purchase flood insurance in Opelika, AL? Don’t hesitate to contact Elliott & Associates Insurance for a competitive quote.