You may not know much about a flood zone until your home or business is located in one. Your insurance premiums will go up substantially when you are located within a flood zone. If you are never in a flood zone, you can carry on without knowing much about them for years. You are in a flood zone when the Federal Emergency Management Agency (FEMA) determines your property lines fall within a special designated target area. The designated areas are higher risk areas and are called flood zone areas.

Natural Disaster Insurance Requirements

Flood zones are not the only high-risk areas requiring special insurance. There are also high risk categories for nearly every other type of disaster. For example, earthquake zones, windstorm zones and hurricane zones also exist. If you are in any of these areas, you will have a higher insurance premium. It is rare to have a home that is not in at least one of these categories due to the geography of the United States. There is a particular risk for disaster in nearly every city in the country. 

Flood Zone Codes

FEMA has four different primary categories for coding flood zones. These four areas include: low to medium risk, high risk, coastal and undetermined. If you are in a low risk area, you will not be mandated to purchase flood insurance. If you are in a high risk or high risk coastal area, you will be required to purchase insurance coverage. The price of your flood insurance will vary depending on which category you fall into. An undetermined area is an area with insufficient information to make a determination about the dangers of a flood. While you are not required to carry flood insurance, your lender or insurance provider may ask you to purchase the insurance in order to protect against unknown risks.

Electing Flood Insurance

If you need flood insurance, you will not have an option but to elect it in order to insure your home. Your insurance company will present you with a number of options, and you can decide which is best based on your personal financial situation. Ultimately, you do not need to carry more than the federal required amount. However, you should consider how much you stand to lose as well as how much you can afford to pay when deciding on your policy. 

Reducing Flood Premiums

Once you have elected flood coverage, you can reduce your premium through loss control efforts. This may mean you will not declare every single claim to your insurance company. You may also receive advice from a home construction company on how to flood-proof your home. This can mean lifting furniture off the floor or moving valuables to the attic. All of these actions can be used to help reduce your premium. You can submit your loss control plan to an insurer. Also, simply by reducing your claims, you will have a lower premium. Ultimately, you cannot totally avoid the cost unless you move. These little steps can help you to avoid a situation where you could no longer afford your home due to the cost of insurance.

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