Since floods are common in America, you need flood insurance to protect your home. And the fact that home insurance doesn’t cover flood insurance, the more reason to invest in flood insurance from Premier Group Insurance of Lakewood, CO. But how much flood insurance do you need? If you are unsure of the amount required in Colorado, keep reading for insights.
It depends on the mortgage lender
If you have secured a mortgage from a federal-regulated lender, you must invest in flood insurance that covers the principal loan amount. However, remember that the lender-required flood insurance may never be adequate for your home. Why do we say so? If the outstanding loan balance is less than the cost of rebuilding your home, you may incur out-of-pocket expenses when floods damage your home.
So, when deciding to know the amount of flood insurance you need, keep the following in mind:
- Cost of rebuilding your home: Ideally, the amount of flood insurance needed should equal the home replacement value and not the market value or the outstanding mortgage balance. Using the home insurance dwelling coverage can be an excellent guide to establishing the required amount of flood insurance.
- The cost of replacing personal assets: Like your dwelling, your personal assets matter too. Be sure to compile your belongings to establish the actual value. Come up with a home inventory with the price and description to establish what you own. The amount of flood contents insurance shouldn’t be less than the replacement value of your assets.
You also need to note that flood insurance provided by the National Flood Insurance Program (NFIP) is limited to $250,000. So, if you need higher coverage, you should consider flood insurance from private carriers.
Learn more about flood insurance in Lakewood, CO
Figuring out how much flood insurance you require can be challenging. For this reason, please get in touch with Premier Group Insurance for guidance.