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Mortgage lenders typically require you to purchase separate flood insurance if you live in a FEMA-designated high-risk flood zone in Colorado. Your standard homeowners insurance policy won’t cover flood damage, so it’s important you learn about flood coverage.
Why doesn’t your standard homeowners policy cover flood damage? It’s because about 90 percent of America’s natural disasters involve flooding, and floods are capable of catastrophic damage in a short period.
Let’s debunk one of the most prevalent insurance myths of all time: yes, you can buy flood insurance, even if you don’t live in a flood zone. As long as your community participates in the National Flood Program (and most do), you’re eligible to buy flood insurance.
The myth that only those in flood zones can get coverage likely lends itself to the fact that only 27 percent of homeowners in the US have flood insurance, according to a 2020 study from the Insurance Information Institute (III).
The home and car insurance app Jerry created this guide to explain why you need flood insurance in Colorado, especially in cities like Colorado Springs with higher flood risks. Let’s get started!
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What is flood insurance?
Whereas a regular homeowners policy covers things like fires, tornadoes, burglaries, and vandalism, flood insurance focuses entirely on water damage caused specifically by flooding.
Standard homeowners insurance covers water damage from plumbing catastrophes. If wind or debris damages your home and rain gets in and causes water damage, that’s covered too. But your home and belongings aren’t protected if there’s a flood unless you have flood insurance.
What does flood insurance cover?
There are two basic types of flood insurance. Building coverage protects your home itself as a structure, while contents coverage protects your belongings.
Once combined, your flood insurance policy protects your home structurally, as well as your heating, electrical systems, furniture, appliances, carpeting, and more.
Flood insurance doesn’t cover everything, of course. As a rule, it won’t cover cars (you’ll want comprehensive car insurance for that), the cash you’re keeping at home, or just about any personal property in your basement apart from some appliances. Flood insurance doesn’t cover sewer backups caused by large-scale flooding, either.
Let’s take a quick look at what is and isn’t covered under the various types of insurance:
|Type of coverage||What it covers||What it doesn’t cover|
|Building||Electrical and plumbing systems, Water heaters and furnaces, Large appliances like dishwashers or refrigerators, Permanently installed bookcases, cabinets, and paneling, Permanently installed carpets, Window blinds, Foundational walls, staircases, and anchorages, Detached garages, Fuel tanks, solar panels, and well water tanks/pumps||Decks and patios, Swimming pools, Fences and landscaping|
|Contents||Clothing, Furniture, Electronic equipment, Curtains, Washing machine and dryer, Portable air conditioners, including window units, Carpets not included in building coverage, Valuables like artwork, up to $2,500||Valuable papers, Currency, Anything stored in a basement|
Do you need flood insurance in Colorado?
You’re only obligated to have flood insurance if you have a federally-backed mortgage and live in a high-risk area prone to flooding or if your mortgage lender requires it otherwise. But unless you live on safely elevated terrain, it’s wise to consider flood insurance a bare necessity regardless.
FEMA’s National Flood Insurance Program (NFIP) offers flood insurance to homeowners based on the agency’s assessment of risk. The NFIP manages the insurance, though the policy is offered from a private company like Allstate or Farmers.
As long as your community participates in the National Flood Program, you’re eligible to invest in flood insurance. Over 40 percent of NFIP claims are filed outside of FEMA-designated high-risk flood zones. Here’s a list of Colorado communities taking part in the National Flood Program.
If your community isn’t on that list, you can still buy flood insurance through select private companies like Neptune or FloodSimple.
What flood zones require flood insurance in Colorado?
If you live in a High-Risk Special Flood Hazard Area (SFHA), and if you’ve gotten a federal grant or loan as disaster assistance, you’re required to have flood insurance for as long as you live on that property.
Take a look at FEMA’s official flood maps and find your area. SFHA’s are designated as FEMA flood zones labeled AE, AH, AO, AR, and A99. Federal flood insurance is required if your property lies within a flood zone starting with A or V, where there’s a 26 percent chance (or higher) of flooding throughout a typical 30-year mortgage.
Flood Factor® is another great tool for looking at how much risk your home is exposed to, with helpful maps and data. We highly recommend taking a look at your property with this tool.
Key Takeaway If you live in a designated high-risk flood zone (starting with A or V) and have a government mortgage, you must purchase flood insurance.
How much does flood insurance cost in Colorado?
The average cost of flood insurance in Colorado is $944 per year, whereas the national average cost of flood insurance is $739 per year.
These rates could drop over time, though. Back in October of 2021, the NFIP instituted a new pricing methodology called Risk Rating 2.0, which is set to reduce flood insurance premiums nationwide by around 23 percent.
Like all forms of home, car, and renter’s insurance, countless variables determine how expensive your flood insurance policy will be, including your home’s location, the size and type of the building, how old the property is, and more.
Residential coverage limits are capped at $250,000 for building coverage and $100,000 for contents coverage, and your insurance provider will typically set a deductible limit on the policy as well.
How to save money on flood insurance in Colorado
Flood insurance is expensive, but enduring a flood without it will end up costing you a lot more. Still, there are ways to mitigate the costs. For instance, you can opt for a higher deductible, follow FEMA’s recommended flood risk mitigation practices, and submit an elevation certificate to your insurance agent.
Of course, the easiest way to save money on home, car, and auto insurance—something you should do to supplement those other methods—is to use Jerry to comparison shop for the best quotes custom-tailored to you individually.
Jerry makes shopping for home, car, and renter’s insurance easier than ever. From finding incredible quotes in a couple of minutes, through signing up for your new policies, all the way down to canceling your old policies, Jerry takes care of all the heavy lifting for you, with incredible customer support from actual humans just in case you need it.
Jerry users save an average of $887 per year on insurance. That’s a lot! So download the app today and take it for a spin. You’ll be blown away by how much you can save!
“You must get this app! It’s my first time getting my own insurance, so I called a few companies myself. Their rates priced me around $600/month. I used Jerry and my rates went down to $250/month. I’m so happy!” —Melissa C.
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