Low cost flood insurance in Texas

Low cost flood insurance is available for most Texas residents. The best rates are with the National Flood Insurance Program (NFIP). This is a program created by the federal government to provide affordable flood insurance.

The NFIP has created maps to determine the level of risk for different zones. The lowest risk areas are B or X zones. If your home or business is in the B/X flood zone and you have not made more than two flood claims you can probably qualify for the preferred rate. You can insure contents only or contents plus the dwelling. If you got $20,000 in contents coverage the preferred rate is $116 per year, at $50,000 it is $156 per year. For the building and contents $50,000/$20,000 is $180, or $200,000/$80,000 is $296. (Other choices up to $250,000 are available)

It is best to insure for the total value of your home and contents. However because B/X indicates a low level of risk you could insure for a lower amount to save on the premium. The idea is that if you do have a flood in the low risk zone it is likely that it may only be a few inches of water and not a total loss. So if you got the $50,000/$20,000 policy for a $200,000 home you could do a lot of repairs and replace a considerable amount of contents with $70,000 in total coverage. And you would be saving $116 per year in premiums. Again this is not a suggested strategy but I understand the thinking and it is far better than having no flood coverage. Remember that any home can be flooded!

If you are not in the B/X zone you can still get flood insurance from the NFIP in most cases. If your home is relatively new you will probably need to get an Elevation Certificate (E.C.). There is a one time cost for this and it is usually between $200 and $350. This measures how high certain points of your home are in relation to sea level. If your home was built before the area was in the NFIP program you may be excused from the E.C. requirement. It is usually advisable to get an E.C. even if you don't have to because it will usually result in a discounted rate. (Don't get an E.C. if you are in the B/X flood zone)

Another option to lower your flood insurance premium is to go with a high deductable. The deductible choices are from $500 to $5,000. I don't suggest the high deductable unless you think your risk is small and you could afford the higher deductible in the event of a claim.