People living in Texas often rush to purchase flood insurance when a hurricane threatens a coastline or a flash flood strikes an area. But waiting until the last minute to purchase an insurance policy may not be a wise decision. So, If you consider yourself to be living in an area prone to flooding, buying flood insurance as soon as possible is the best way to ensure your property is protected.
While most flood policies are generally provided by the National Flood Insurance Program (NFIP), other options fall under the category of private flood insurance.
In this blog, we will give you an overview of the primary differences between private flood insurance and NFIP policies for better understanding.
National Flood Insurance Program (NFIP)
The federal government created the National Flood Insurance Program (NFIP) in 1968 to provide flood insurance protection to commercial and residential properties in high-risk areas. While the policies are federally backed, you can purchase the coverage through an insurance agent/carrier through a write-your-own program. This allows flood insurance companies in Beaumont, TX, to issue policies on behalf of NFIP using their customer service systems.
Benefits of NFIP Coverage
- You can have multiple claims, unlike private policies where they may not opt to renew your coverage after a claim is filed or if they feel you are at high risk for flooding.
- Provide cost control coverage to renters, homeowners, and business owners provided the property’s value does not exceed $250,000.
- The availability of NFIP is widespread across the United States.
Although having a federally backed policy has its advantages, limitations come with that. NFIP policies come with a set of standard policy limits and coverages as well as deductibles that may not meet your specific needs.
- Dwelling Coverage: Pays to repair or rebuild your home or garage if damaged by flooding. The maximum limit set by NFIP for residential dwelling coverage is $250,000, which may not be enough with today’s rising rebuilding costs.
- Personal Property Coverage: Pays to repair or replace your items, including furniture, clothes, and electronics, damaged by a flood. The maximum limit set by NFIP for residential, personal property coverage is $100,000.
Also, the waiting period for NFIP policies is longer than for private flood insurance policies. You would have to wait up to 30 days before your policy is in effect.
Private Flood Insurance
Private flood insurance policies are sold and serviced by private insurers without the restrictions set by the federal government. This allows them to offer more options to consumers, like higher coverage limits, lower deductibles, and more specialized endorsements.
Moreover, along with higher coverage limits, you can also elect to purchase full replacement cost coverage to avoid the uncertainty of settling for depreciated value when it comes time to make a claim.
Additional benefits that come with private flood insurance policies in El Paso include:
- More customization options include non-flood coverage, replacement cost rider, high values, and more.
- Lower waiting period – policies are typically in effect within 7 – 14 days.
- Unlike NFIP policies that are only available in certain areas, private flood insurance is offered to high-risk and low-risk properties no matter where you live.
- Loss of use coverage is a major benefit of a private flood insurance policy which pays for you to live elsewhere while your home is being repaired or rebuilt.
- Faster payment process when filing a claim as private flood insurers have their systems and processes.
Drawbacks of Private Flood Insurance
- Higher premiums – Private flood insurance policies tend to be more expensive than NFIP policies, so if you seek a more economical option, private flood insurance may not be the ideal choice.
- Limited availability – While NFIP policies are practically available everywhere, it may be difficult to find a private flood insurance policy in high-risk areas.
What’s Best For You?
When choosing the best option for you, private flood insurance or NFIP, there’s no universal answer, as it all depends on where you live and your individual needs. Therefore, it’s important to carefully research both options before deciding. Also, check quotes from companies offering private flood insurance in Brownsville and compare them with the cost of an NFIP policy.
TX Insurance Quotes, the affordable flood insurance providers in Texas, are here to assist you in finding the best coverage and value for your flood insurance needs. We work with different private and NFIP carriers to make sure you get the best coverage for your unique needs.
Related Read: Everything you need to know about flood insurance in Texas.