WEATHER
What is the average cost of a National Flood Insurance Program policy in California? What does it include?
Flooding in California is prompting interest in the National Flood Insurance Program. Here is what you need to know.
There has been significant flooding in Southern California, which has disrupted the lives of many residents in the region. The storms have unfortunately caused the loss of lives as well. The heavy rainfall has triggered hundreds of mudslides, destroying houses and damaging infrastructure. Los Angeles has already reported rainfall levels that amount to 75 percent of their annual average rainfall. Although such high levels of rainfall are rare in the area, they serve as a reminder that homeowners should invest in flood insurance as these storms can cause significant property damage.
Why invest in flood insurance
You can purchase flood insurance to protect yourself against flooding and the possibility of losing your home and/or personal possessions. The federal government established the National Flood Insurance Program (NFIP) and can deliver this product through partnerships with over fifty private insurance companies. All those participating in the NFIP program in your area can be identified using a tool developed by FEMA.
What does the average plan cover?
Flood insurance covers two aspects of one’s property: building and contents.
According to FEMA, NFIP policies cover the following building elements on one’s property:
- Electrical and plumbing systems
- Furnaces and water heaters
- Refrigerators, cooking stoves, and built-in appliances like dishwashers
- Permanently installed carpeting
- Permanently installed cabinets, paneling, and bookcases
- Window blinds
- Foundation walls, anchorage systems, and staircases.
- Detached garages
- Fuel tanks, well water tanks and pumps, and solar energy equipment
In terms of content, the agency assures that all policies cover:
- Personal belongings such as clothing, furniture, and electronic equipment
- Curtains
- Washer and dryer
- Portable and window air conditioners
- Microwave
- Carpets not included in building coverage (e.g., carpet installed over wood floors)
- Valuable items such as original artwork and furs (up to $2,500)
Low deductible vs high deductible option
The cost of a flood insurance plan depends on whether you choose a high or low-deductible policy. If you opt for a lower deductible, you will have to pay a higher monthly premium, but in the event of a flood, you will pay less out of pocket. Conversely, choosing a higher deductible will reduce your premium, but you will have to pay more out of pocket before your coverage kicks in.
The insurance giant Progressive reported that the average NFIP policy costs around $700 a year, or $58 a month. This is a small price if the risk of flooding is high in your area.