More than 3 million homeowners who live in coastal areas will see premiums for federal flood insurance rise this year as the Federal Emergency Management Agency adjusts insurance rates to reflect the risks of climate change.
Damage from water that rises from the bottom up—such as flooding from a heavy rainfall or hurricane—isn’t covered by homeowners insurance. But your policy will likely cover damage if your water heater leaks or a water pipe inside your house bursts.
The National Flood Insurance Program is the primary provider of flood coverage, although some private insurers also provide flood insurance. The NFIP provides about $1.3 trillion in coverage for more than 5 million policyholders in 22,500 communities across the nation. The cost of an NFIP policy varies, depending on risk, but averages about $700 a year. A policy from a private insurer averages $1,050 a year, according to Policygenius (opens in new tab), an insurance marketplace.
NFIP recently released new flood insurance rating procedures that are designed to provide a better measure of the risk of flooding in particular areas. The new methodology, which went into effect in October, will lower premiums for about one-fourth of existing policyholders, while more than 3.8 million will see rates increase.
For most of those homeowners, the increase will be $10 or less per month, according to an analysis by ValuePenguin (opens in new tab), a consumer website. About 4% of flood insurance policyholders will pay more than $20 extra a month. Because of the geographic factors that influence the cost of flood insurance, some states are more likely to see higher increases. More than 10,000 policies in each of Florida, Texas, Louisiana, New Jersey and New York will face the highest price increases, according to ValuePenguin.
How to buy coverage. To purchase flood insurance, call your insurance company or insurance agent. You can also find a provider at www.floodsmart.gov/flood-insurance-provider (opens in new tab) or by calling the NFIP at 877-336-2627.
The program provides up to $250,000 of dwelling coverage and up to $100,000 of contents coverage. The policy has two separate deductibles (one for dwelling, one for contents) that you must pay before coverage kicks in. Deductibles start at $1,000 but can go as high as $10,000 for single-family homes.
Homeowners who want more coverage may be able to buy private insurance, which typically has higher coverage limits. Premiums for a private policy will vary depending on where you live; in some cases, they may be lower than premiums for an NFIP policy.
Want to Increase Income? Focusing on 5 Elements Can Help
There are multiple ways to generate income, but to make your money work for you, consider sustainability, maximizing, automation, reinvestment and tax efficiency.
By Jamie P. Hopkins, Esq., CFP, RICP • Published
Are Annuities Good Investments? Weighing the Pros and Cons
Love ’em or loathe ’em, annuities can be a smart investment tool for the right person under the right circumstances.
By Nate Miller, Investment Adviser Representative • Published
The 25 Cheapest Places to Live: U.S. Cities Edition
places to live Take a look at our list of the cheapest places to live in America for city dwellers. Is one of the cheapest places to live in the U.S. right for you?
By Dan Burrows • Published
Best Cash Back Credit Cards of January 2023
Smart Buying Looking for the credit card that pays the most cash back? These lenders may pay hundreds of dollars, with minimum hassle.
By Lisa Gerstner • Last updated
I-Bond Rate Is 6.89% for Next Six Months
Investing for Income If you missed out on the opportunity to buy I-bonds at their recent high, don’t despair. The new rate is still good, and even has a little sweetener built in.
By David Muhlbaum • Last updated
What Are I-Bonds?
savings bonds Inflation has made Series I savings bonds enormously popular with risk-averse investors. How do they work?
By Lisa Gerstner • Last updated
Your Guide to Open Enrollment 2023
Employee Benefits Health care costs continue to climb, but subsidies will make some plans more affordable.
By Rivan V. Stinson • Published
10 Things to Know About Hurricane Insurance Claims
Becoming a Homeowner Hurricane damage? Know what’s covered, what isn’t, and how to make the most of your policy if you need to file a claim.
By Kimberly Lankford • Published
Watch Out for Flood-Damaged Cars from Hurricane Ian
Buying & Leasing a Car In the wake of Hurricane Ian, more flood-damaged cars may hit the market. Car prices may rise further because of increased demand as well.
By Bob Niedt • Last updated
What You Need to Know About Life Insurance Settlements
life insurance If your life insurance payments don’t seem worth it anymore, consider these options for keeping the value.
By David Rodeck • Published