Many people think that simply having homeowners insurance is enough to cover them in all situations. For this reason, many homeowners, especially in areas such as New Jersey that often see severe storms or even hurricanes, donate have flood insurance to supplement their NJ homeowners insurance policies.
Because many homeowners have to have insurance as a stipulation of their mortgage, many people donate fully understand what their policies cover and what areas are left vulnerable. While NJ homeowners insurance policies do cover most incidents, there are some, such as natural disasters that are left off the typical coverage list.
In the U.S., flood insurance is offered through the National Flood Insurance Program, which offers policies that are provided by private NJ homeowners insurance companies and managed by the Federal Emergency Management Agency. This agency determines and regulates the cost of flood protection and the extent of coverage.
In 2012, flood damage in New York caused more than $3.4 billion in insured losses. In addition to this, flood damages accounted for approximately $3.2 billion in losses in New Jersey. The significant losses in these two states prove that the need for flood insurance throughout these states, especially for homeowners in coastal areas, is high. Without flood insurance, in the event of a natural disaster and subsequent flooding of a house, the homeowner would be held accountable for all of the damages, whereas, with flood insurance, a lot of that cost would actually be covered.
While determining whether flood insurance is necessary for a particular homeowner in a particular reason, it is always better to have more coverage than less. At the current rate of $650 annually, the cost of the premium is not so high as to make a large dent in a homeowner’s budget and can only succeed in protecting that homeowner in case of a disaster. Hopefully, a homeowner never has to make a claim as a result of disasters such as floods, but, in the event that it becomes necessary, at least the financial blow won’t be quite as large.