Flood Concerns and NJ Flood Insurance

Flood Concerns and NJ Flood Insurance

Flooding has long been a concern for many New Jersey residents and often occurs in moderate-to-low risk areas, as well as in known high-risk areas. This is quite often due to poor drainage systems, rapid accumulation of rainfall, snowmelt, and broken water mains, which can all result in flooding. NJ flood insurance, available from many carriers, can aid owners in high-risk areas, where there is at least a 1 in 4 chance of flooding during a 30-year mortgage.


Another concern is mud, which can cause severe damage to homes located on or near hills. Properties on hillsides can be damaged by mudflow, which is a covered peril under a standard flood insurance policy. For these reasons, coverage is required by law for buildings in high-risk flood areas as a condition of receiving a mortgage from a federally regulated or insured lender.


Many people still take risks by not purchasing a flood policy


Although flood insurance can be relatively inexpensive depending on geographical location, many Americans still neglect to purchase protection. Yet according to the National Flood Insurance Program (NFIP) many homes have a 26 percent chance of flooding as opposed to the 9 percent chance of experiencing fire damage during the course of a typical 30-year mortgage. Almost 25 percent of all flood insurance claims come from areas with low to moderate flood risk.


NFIP, which is also in charge of mapping the nation’s floodplains, says the average flood claim has been over $33,000 for the past 10 years. NFIP provides the basis for flood-management programs and even offers an online tool where homeowners can find out the flood risk related to their property.


Since the federal government sets flood insurance prices, private insurance companies that sell flood insurance compete on service, not on price. Homeowners can find agents selling NJ flood insurance through the NFIP website, or can also call their current home insurance company, as well as other independent sources.

A homeowner can insure their home for up to $250,000 and its contents for up to $100,000. Renters can cover their belongings for up to $100,000, and business owners can insure their building and its contents for up to $500,000. Coverage choices also vary depending on the flood-risk zone.


photo credit: Broo_am (Andy B) cc