If you are a tenant, it is wise to insure your contents. The policy premium is based on several factors, including the flood risk of the building that you occupy.
Most renters in moderate- to low-risk areas are eligible for coverage at a preferred rate. A Preferred Risk Policy provides both building and contents coverage for properties in moderate- to low-risk areas for one low-price.
If you don't qualify for a Preferred Risk Policy, a standard-rated policy is still available. Even though flood insurance isn't federally required, anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding. When it's available, disaster assistance is typically a loan you must repay with interest.
If you live in a high-risk area, a standard-rated policy is the only option for you. It offers separate building and contents coverage.
Flood insurance premiums are calculated based on factors such as:
- Year of building construction
- Building occupancy
- Number of floors
- The location of its contents
- Its flood risk (i.e. its flood zone)
- The location of the lowest floor in relation to the elevation requirement on the flood map (in newer buildings only)
- The deductible you choose and the amount of coverage
If you rent or own a condominium unit, you may want to look at both building coverage and contents coverage.
Policy rates are based on many factors, including flood risk, amount of coverage and elevation.
PRIMARY RESIDENCE DISCLAIMER
For flood insurance rating purposes, a primary residence is a building that will be lived in by the insured or the insured's spouse for at least 80 percent of the 365 days following the policy effective date. If the building will be lived in for less than 80 percent of the policy year, it is considered to be a non-primary residence.