New England residents looking to add flood insurance to their policies after the recent hurricane and subsequent floods are rapidly realizing that getting adequate home insurance costs them more than it does homeowners in southern states. The reason is that basic flood insurance is suited for homes in the Gulf Coast region, where houses are generally built without a basement and therefore don’t need home insurance coverage for anything below the first floor. However, in the Northeast of the country, many homes have basements and have suffered significant water damage both to their structures, as well as their contents.
In addition, New England homeowners face higher costs of labor and materials than in other parts of the country, and the $250,000 provided by the federal flood program to rebuild a home and $100,000 to replace the contents is not enough. As a result, New England homeowners most likely need a total of three different insurance policies to cover potential flood damages: a basic home insurance policy, a flood insurance policy, and an additional policy to cover the costs of damages to floors below the first floor, such as cellars and basements. While many homeowners typically purchase additional insurance after a weather calamity, many drop it again after a few years due to the height of their combined premiums.
In order to minimize their home insurance costs, homeowners are advised to review their current policies and determine whether they need additional flood insurance and supplemental insurance for basements. If they do, they should use an online comparison site to find the best home insurance coverage that offers realistic financial protection.
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