Option 1: Hope that you'll receive Federal disaster relief if a flood hits.
Many people wrongly believe that the U.S. government will take care of all their financial needs if they suffer damage due to flooding. The truth is that Federal disaster assistance is only available if the President formally declares a disaster. Even if you do get disaster assistance, it's often a loan you have to repay, with interest, in addition to your mortgage loan that you still owe on the damaged property.
Most importantly, you must consider the fact that if your home is flooded and disaster assistance isn't offered, you'll have to shoulder the massive damage costs alone. The bottom line is that if you're looking for secure protection from financial loss due to flood damage, Federal disaster assistance is not the answer.
Option 2: Buy flood insurance and stay protected no matter what.
When disaster strikes, flood insurance policyholder claims are paid even if a disaster is not Federally declared. Flood insurance means you'll be reimbursed for all your covered losses. And unlike Federal aid, it never has to be repaid.
In general, a policy does not take effect until 30 days after you purchase flood insurance. So, if the weather forecast announces a flood alert for your area and you go to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.
Flood insurance protects you from the financial devastation caused by floods. Even a few inches of water can bring thousands of dollars in repair and restoration costs. Most homeowners insurance does not cover floods. You need flood insurance.
Flood insurance, like earthquake insurance, is “single peril” insurance, sold separately from homeowners insurance. Flood insurance protects against losses to buildings and their contents, not the land surrounding them. The coverage applies whether the flooding results from heavy or prolonged rains, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure, or other causes. To be considered a flood, the waters must cover at least two acres or affect at least two properties.
Flood insurance is available both within and outside of floodplains. Your property’s flood risk is shown on flood hazard maps. Different types of policies are available depending on your flood risk.
If you live in a high-risk area, you will need a Standard Policy. Most mortgage lenders will require that you have such a policy before they will approve your loan.
Outside of high-risk areas, flood insurance is also available, usually at lower cost. A Preferred Risk Policy covers both a home and its contents, with premiums as low as $119 per year. While you aren’t federally required to have flood insurance in a low-to-moderate risk area, that does not mean you won’t ever need it. Large floods often extend beyond the boundaries of high-risk areas and smaller floods occur outside high-risk areas as well. In fact, a quarter of all flood insurance claims come from low-to-moderate risk areas.
Flood insurance is sold and serviced by private insurers, and backed by the federal government. More than 85 companies sell flood insurance. Often the same insurance agent who wrote your homeowners insurance policy can help you obtain flood insurance. Or you can find an agent near you by clicking on Agent Locator to the left and entering your zip code. Flood insurance costs the same wherever you purchase it, because the rates are set by the National Flood Insurance Program.
Flood insurance covers both homes and businesses. With residential coverage you can get up to $250,000 of insurance to protect your home and up to $100,000 to protect its contents. If you are located in (or moving into) a high-risk area, federally regulated or insured lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower. With commercial coverage, you can get up to $500,000 of insurance to protect your building and up to $500,000 to protect its contents.
for more detail click on the link www.floodsmart.gov