The best of flood insurance companies evaluate the risk-rate of an area before deciding on the premium. The value of insurance falls under 3 categories:
A. Moderate or Low-Risk Area
These are known as Non-Special Flood Hazard Areas or NSFA. The risk rate of any flood occurring within this space is between 0.2% to 1%, which means that the risk of flooding is low. In such cases, the premium is quite low and for homeowners, it is a good idea to buy the insurance. The cost of policies per year under the NSFA category ranges from $ 405-452. You have to pay 20% of the claim to NFIP as the policies fall under them.
B. High-Risk Area
When we speak of high risk, we refer to SHFA or Special Flood Hazard Areas, where the chances of a flood damaging a home are high. According to FEMA, there is 1 in 4 chance of a flood in these regions and being safe and protected is a good option. For properties in such regions, high-risk insurance companies charge quotes which are higher than NSFA zones. Average yearly premium payment for SFHA zones is $2,500.
C. Undetermined Risk Area
Premium rates are higher for such sectors as there has been no survey conducted to check the flood-risk rate of such areas.
If your house is under mortgage plans and the repayment is due, it is vital to have the property insured lest any accidents occur from flooding.