Buying your first home is an exciting experience. If you plan to buy a home in an area that is prone to flooding, it is important to realize that the lender from whom you are getting your loan may require you to have flood insurance on the home for the entirety of your loan agreement. The following guide helps you learn what factors are taken into consideration to determine the rate you pay for your flood insurance premiums.
Age of the Home
The age of the house that you are buying is taken into consideration because older homes may not be as sturdy as a home built more recently. The insurance company will inspect the home to determine if the foundation, walls, and frames of the home are durable and able to stand up to a flood.
Location of the Home
If there is water directly in the vicinity of the home, there is a good chance that your flood insurance will be pricier than a home that is located further away from water sources because the chances of flood damage will be higher. The insurance company will have specific guidelines that dictate how much you are required to pay for the coverage you need.
Style of the Home
Two story homes may be more expensive to insure than one story homes because there is so much more space that could be damaged by a flood. Homes with a basement may also be more costly to insure because there are areas that could be completely devastated by a flood and require massive repairs.
Available Discounts
There are some discounts that may be available to you. Your age could qualify you for a discount because many insurance companies offer discounts to senior citizens. The age of the home could qualify you for a discount because newer homes are often designed to be safer and more durable than older homes. Bundling your insurance policy with other forms of insurance, such as boat, motorcycle, and car insurance can save you some money, as well.
Once the insurance company has taken the time to determine all of these factors, they will establish the base rate for your homeowners insurance for the year. It is important to realize that you are required to keep the insurance in good standings while you have a loan on the home to ensure that necessary repairs can be made if a disaster does hit. If your insurance lapses, the lender may consider it as a default on the loan, which could lead to a legal battle for your home. Contact a company like Jimmy Fisher State Farm Ins for more information.
Share