The necessity of flood insurance

Flood insurance at a low cost is available for residents of Texas under the National Flood Insurance Program (NIFP), a program of the Federal Government for providing flood insurance

The NIFP has divided places on the basis of their level of risk of water damage. The safest areas are the B zone and the X zone. If you own a property in a B/X zone and if you have not forwarded more than a couple of flood claims, you can get a preferred rate on your insurance against flood.

It is always best to fully insure your home and the contents therein. However in case your house falls in the B zone or the X zone, you can insure for a lesser amount and thus save on premiums. You can do that as the house is in a low flood risk zone and hence is less likely to be affected by water logging. Also, in case a flood strikes, your house would b less affected as it is situated in a low risk zone. However, it is best to insure fully the amount of your house and the contents as any house is equally susceptible to damage.

Even if your house is not situated in a B/X zone, you are still eligible for an insurance policy from that NFIB. In case of new homes you will need an elevation certificate. This one time expense will put you back by about $200 to $350. The EC measures the height of your home from the average sea level and hence decides the amount of discount that you are eligible in case of an insurance against water damage policy.

You can also opt for a policy with a higher deductible. However, this is not recommended in case in your opinion the risk is not great and if you can afford a lower deductible.