When should flood insurance be purchased—and from whom? That depends on the location of your home. If your home lies on a hurricane-prone beachfront or an area susceptible to flash floods, you may not be able to purchase flood insurance at all. If your home is located in an area recognized as a flood zone with no fail-safe protection (such as a dam), you should get flood insurance.

If you live in a Special Flood Hazard Area (SFHA), you will be required by law to have flood insurance. If you live in a low-risk flooding area, it is not necessary to purchase flood insurance.

Premiums and deductibles for flood insurance can vary widely, depending on the value of the property being covered and its location. Flood insurance costs consumers at least a few hundred dollars a year.

The best place to find information regarding homeowners flood insurance is through FEMA’s National Flood Insurance Program (NFIP). According to the NFIP, nearly $700 billion dollars of property was covered against flooding by this program in 1993.

The NFIP Web site is an informative resource for home flood insurance information. You may reach the National Flood Insurance Program at 800-427-5593.

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If you’re shopping for homeowners insurance for the first time, you may be shocked to see the different types of homeowners insurance there are. This is a complex business, and before you buy a homeowners insurance policy, you need to be sure you understand what the different types of insurance are and what they cover. That way, you’ll know that you’re covered and what’s covered in case the worst happens.

Types of Policies:

HO-1: This is the most basic of homeowner’s insurance policies; in fact, it’s so basic that you can’t even get it in some states because lawmakers don’t believe it protects you well enough. This type of homeowners insurance protects you against only fire and lightning damage.

HO-2: This is a more common homeowner’s insurance policy. It protects your home from all kinds of damage except for those explicitly stated as not covered in your policy. Most homeowners have this type of policy, but you’ll want to be sure that you look over what your policy doesn’t cover, as you may want to supplement the policy to protect yourself against these events.

HO-3: This policy is much like the HO-2, and it’s also very common. However, this type of policy protects not only your home but also your outbuildings, such as barns, garages, and sheds, and the belongings inside your home. Again, be sure that you look over the homeowners insurance policy to understand what is not included in it.

HO-4: This is a policy for a renter that offers protection for your belongings inside a home you don’t own; it may also pay for medical costs associated with things covered under normal HO-2 policies, and it may help cover your living expenses if you have to move due to damage on your rental home.

HO-6: This is a homeowner’s insurance policy for a person who owns a condo unit. The policy will cover the person’s belongings and other parts of the unit that the association doesn’t cover.

HO-8: This is a homeowner’s insurance policy for older homes, which may not be insurable under more traditional insurance policies. For instance, if your kitchen with plaster walls catches on fire, this insurance policy will give you money to replace your walls with modern materials at a modern price.

Besides these types of homeowners insurance, there are also add-ons that can cover expensive or valuable personal belongings like special collection items and jewelry, and there are other add-ons that can protect against things like flooding if your insurance policy doesn’t include that coverage. Each state may have a different designation for these types of insurance, but for the most part, they cover the same things. Before buying an insurance policy, talk with a knowledgeable agent who will be able to get you the coverage you need.

The most basic homeowners insurance policy is HO-1, but that policy isn’t even available in some states because its coverage is so limited. For the most part, HO-2 insurance is considered basic homeowners insurance now, and it covers lots of different things. If you’re wondering what basic homeowners insurance covers, here’s a quick list of what HO-2 homeowners insurance will take care of:

• Falling objects; includes damage from the weight of ice and snow
• Damage from water from your home’s plumbing
• Fire
• Smoke
• Electrical damage to appliances
• Theft/burglary
• Vandalism
• Volcanic eruption
• Water heater and heating system ruptures
• Windstorm
• Riot/civil commotion

Beyond this, almost all basic homeowners insurance policies will cover legal expenses if someone sues you for getting hurt on your property, although amounts and limits on this sort of coverage vary from company to company.

If you think this is a comprehensive list of what basic homeowners insurance should cover, you may not be looking at all the angles. HO-3 policies are now the most popular basic homeowners insurance, and they cover pretty much any conceivable damage to your home, and this type of policy is more likely to cover buildings other than the house itself, such as garages and barns.

Basic homeowners insurance may be enough for you, but if you live in an area prone to flooding or earthquakes, you may need to consider getting extra coverage. Some insurance companies will offer this as additional coverage to your basic homeowners insurance policy, but often times, you’ll have to get flood and earthquake coverage through the government.

Also, if you have very valuable possessions, such as jewelry or a card or coin collection, you may have to buy a separate insurance policy for these items, as your possessions may only be paid for up to a certain dollar amount.

The best way to find out what basic homeowners insurance covers is to ask. Look around at different insurance companies, and ask what their homeowners insurance policies cover. You may be surprised at the wide differences; even though basic homeowners insurance will cover the same essential things, different companies will have different caveats and limits, so be sure you know exactly what you’re getting before you sign on the dotted line.

Also, if you’re worried that you won’t have enough insurance to cover you on a rainy day, ask about umbrella insurance. This type of insurance will cover you against liability suits, and in our law suit happy day and age, this might not be a bad idea. Also, umbrella coverage is usually only $200-$300 a year, so the extra couple million dollars in legal coverage could be a worthwhile addition to a basic homeowners insurance policy.

Specialized policies, or “floaters,” are available to cover valuable items at an agreed-upon dollar amount as scheduled on the policy. If you prefer, insurers may be willing to cover your valuables on a blanket basis at an agreed-upon value per type. For example, if you have many items of jewelry, you might agree on $100,000 as the coverage amount.

If you have fine china or antiques, check to see if coverage includes accidental breakage. Such breakage would not be included under most homeowners policies.

Floaters typically lack deductibles, so coverage begins with the first dollar of loss. In addition, these floater policies are usually written on an “all-risk” basis. This means that losses are covered for all perils, unless a peril is specifically excluded.

Another nice feature of floaters is “mysterious disappearance” coverage. While many policies, particularly inland marine policies, exclude mysterious disappearances of items, floaters often cover them. (Mysterious disappearance, as you might guess, involves a loss where the cause is unknown.)

Your approach to risk management is a key element in the process of insuring your valuables. Most insurers will consider your willingness to minimize the chance of loss when pricing your coverage. For example, if you hang a Renoir painting in your living room, and you install an alarm system to protect it, you may receive a discount for being proactive.

Some insurers will even help facilitate your risk management strategy by assisting you in the inventory process. They may also help coordinate third-party appraisals-an essential element of the risk-management and insurance processes.

All too often, people undervalue their own property, therefore obtaining too little coverage. A qualified appraiser can help you assess the value of your property and provide necessary documentation of its value in the event of a loss.

Follow these guidelines to ensure you have adequate coverage:

1. Take inventory of your valuables, including jewelry, art, and other items, like an autographed baseball.
2. Obtain an appraisal of the more important items. Be prepared to go to a specialist to determine the value of special items. You wouldn’t go to the same appraiser for the autographed baseball as you would for your jewelry.
3. Talk to your insurance agent about floaters that might be available, discuss coverage and set limits. Compare the coverage to your basic homeowners policy in order to fully assess the value of the additional coverage.
4. Find out what additional services your insurer offers. If they are able to assist you in the conservation and preservation of your valuable property, and if they bundle these services together in a cost-effective manner, it may become a ‘no lose’ situation for both you and them. You will receive excellent benefits and service; they will acquire a loyal and prudent client who may be with them for many years to come.

If you are looking for home insurance quotes, feel free to click here to use our home insurance quoting service. Simply fill out the quote request form and we can match you with the policy that best suits your needs.

Some of the changes Congress hopes to encourage are remedial in nature. For example, $40 million a year has been authorized to pay for elevation, relocation, demolition and flood-proofing of homes in flood zones that have been the subject of repeat claims.

Under the new legislation, the government would pay 90 percent of flood-proofing costs, and the property owner would pay 10 percent. This remediation would be optional for the homeowner, but the alternative would be bleak.

According to the Associated Press Online, one study reported that the subsidized NFIP plan costs insureds only about 38 percent of calculated risk rates, costing the government about $200 million a year. Under the new plan, refusal to accept the government’s “mitigation” offer would end the subsidy for the property owner, resulting in a significant increase in flood insurance premiums.

Dissenters in Congress include Rep. Billy Tauzin, a Louisiana Congressman, who complained that the bill unfairly targets his constituency, noting that those who live in earthquake- or tornado-prone areas are not similarly penalized.

The bill targets the most prolific claimants in the NFIP program. There are 48,000 properties that, within a 10-year period, have experienced multiple flood claims, exceeding the deductible by at least $1,000 and accounting for 25 to 30 percent of all claims. Of those, the program targets the 10,000 properties that top the list for frequency and severity of claims. Also targeted are homes whose multiple claims over time have totaled more than the value of the insured property itself.

With the spotlight on flood insurance, now is a good time to review your business or home management strategy regarding floods, the most common disaster scenario in the U.S., according to FEMA. But do not make the assumption that disaster relief will be available, preventing the need for flood insurance. Less than half of flooding events are declared disasters, says FEMA, often leaving insurance the sole source of compensation for victims.

Flood insurance is available to protect homes, condominiums and nonresidential buildings including farm and commercial structures in participating communities. It’s important to find out whether or not your community participates in the NFIP program, thereby making you eligible for flood insurance under the plan.

Consider buying flood insurance before a flood is imminent. Although it is possible to buy coverage just prior to a flood, the policy does not become effective for 30 days unless the flood map for your community was revised in the last year or the insurance is required to close a loan.

It is a commonly-held belief that homeowners insurance covers floods. While certain water damage may be covered under a homeowners policy, most flood damage is covered only by flood insurance (with the possible exception of an excess, or umbrella, policy specifically intended to cover extra expense incurred by flooding).

The NFIP defines flooding as a general and temporary condition during which the surface of normally dry land is partially or completely inundated with water. Flooding can be caused by:

• Overflow of tidal or inland waters
• Runoff, such as from rainfall
• Mudslides or mudflows caused by flooding or
• Soil erosion exceeding normal levels, causing collapse of land along a body of water

For more information about flood hazards, steps to take in mitigating flood damage, or how to deal with the aftereffects of a flood in your community, check out the FEMA web site at http://www.fema.gov/business/nfip/.

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Many insurers will decline to insure your home if you have a trampoline. Some will only do so if the trampoline is excluded, leaving you vulnerable to lawsuits. But even if your insurance company agrees to cover your trampoline, it’s in your child’s best interest to keep both feet planted on the ground.

As the weather warms up and the kids put down the controllers and venture outside, you may be confronted with the trampoline question. Resist.

The American Academy of Pediatrics (AAP), an organization composed of 60,000 pediatricians nationwide, thinks trampolines are a bad idea, and further, they believe that no amount of parental supervision is enough to eliminate the potential for serious injury. As much as they’d like to encourage physical activity in today’s increasingly sedentary youth, they believe the risks associated with trampolines to be too great.

And they’ve got a point. According to a 2007 study by Rhode Island Hospital, between 2000-2005 there were 531,378 trampoline-related injuries, amounting to 88,563 per year. And 95 percent of those injuries occurred on a home trampoline.

And these mishaps run the gamut from minor cuts and bruises to spinal cord damage resulting in paralysis to death. The following are common injuries according to the AAP:

• Broken bones (sometimes needing surgery)
• Concussions and other head injuries
• Sprains/strains
• Bruises, scrapes, and cuts
• Neck and spinal cord injuries

If that isn’t enough to persuade you, there’s the liability issue. If someone else’s child is injured on your trampoline, you could be on the hook for any medical bills. Worse still, if your neighbor’s child climbs your fence while you’re away and gets hurt, you may be liable then, too, even though the child was trespassing at the time.

Trampolines are known as “attractive nuisances”: locations, objects and/or conditions that are both dangerous and attractive to young children. (Examples include swimming pools, farm equipment, abandoned cars, horse stables.) Legally, the burden is on owners of these attractive nuisances to take adequate measures to protect children–even trespassing children–from harm, e.g., erecting fences and installing locks.

Acknowledging that trampolines pose a health risk to your kids and legal and financial risks to you, the question to ask yourself is, Are they worth it?  

A year ago, a person submitted the following question to Yahoo Answers: “Anyone bought a trampoline, put it up and then have an insurance company demand you take it down or drop you?”

Here are excerpts from the winning answer:

“Get rid of the trampoline,” the answerer advised. “Do you really want to jeopardize your financial future on a toy? Take this how ever you want…..I’m an insurance adjuster. And after every thing I have seen on trampoline claims…I would NEVER have one.”

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