As a home insurance provider, you want to supply your clients with the best fit of coverage. However, the policy someone needs will depend on many factors, such as the home's value and location. Indeed, location might prove one of the most important factors in expanding a client's policy. Depending on where someone buys a home, they will need specific coverage. They might even need to get additional coverage, most importantly flood insurance. How do you talk about this subject to your client?
Flood insurance is a mandate for some insurance clients, and an option for others. It blurs the line between government-supported and private insurance.
Flood Insurance As A Whole
Note it now: Homeowners insurance usually does not cover weather-related floods. It might cover floods resulting from burst pipes and similar incidents. However, it likely won't cover damage from rain-related or river floods. Groundwater flooding also usually doesn't have coverage.
So, if a flood from an overflowing river gets into your home, you'll likely not have any help from your home insurance. Thus, likely only a specific flood policy will help cover such risks. You should impress this on your clients. They will then need to consider whether homeowners insurance on its own is enough for them.
Why People Need Coverage
You could make the guess that any property might face flood risks. Yet, some properties face far greater risks than others. Homes in river bottoms will likely need this coverage much more than those that sit on hills. Indeed, in many places, homeowners have a requirement to get flood coverage.
Your clients might ask why they have a mandate for flood insurance. The simple answer: The risks are too high. The law will thus need certain homeowners to carry coverage.
The National Flood Insurance Program (NFIP) is the primary source of flood insurance for most homeowners. While certain private companies offer coverage, most plans come backed by the NFIP. The program requires most people in flood zones and with mortgages to get coverage. This helps mortgage lenders protect their own interest in the property.
But, more importantly, coverage will protect home buyers. They don't want or need to face problems because of water damage in their home. Therefore, it's your job to discuss with them the practicality of flood coverage. Coverage might still benefit those who don't live in flood zones. However, for those in flood zones, the need is critical.
So, talk to your client and learn about their property. Find out where they live, whether they have a mortgage and whether they have a flood insurance rule. With the right investigation, you can find them the right coverage.