Rio Rancho Flood Insurance

Complete Guide to Rio Rancho, NM Flood Insurance

New Mexico Flood Insurance

The city of Rio Rancho, NM is part of the National Flood Insurance Program (NFIP), so residents can receive federally subsidized flood insurance policies, even if their property is not located in a FEMA designated flood plain. Is your property covered against the devastating flood damage that can occur during monsoon season? If not, you may want to consider buying flood insurance.

Flood insurance policies take 30 days to go into effect, so do not wait until heavy rains are imminent to make a purchase. Talk to an independent insurance agent in Rio Rancho for help obtaining suitable, yet affordable, flood insurance coverage.

What Is Flood Insurance?

Every year, floods cause about $5 billion in damage in the United States. Unfortunately, most conventional insurance policies like home insurance, renters insurance, and business insurance do not cover flood damage. This is because the costs to cover this damage became too high for insurance companies to handle while still offering reasonable rates to their customers.

That is why in 1968, the federal government created the National Flood Insurance Program, or NFIP. Through this program, individuals and business owners are able to purchase affordable flood insurance policies through a federally backed program. Cities that are participants in the NFIP, such as Rio Rancho, are required to take steps to reduce and minimize the damaging effects of floods.

How Much Does Flood Insurance Cost in Rio Rancho, NM?

Rates for coverage are standard across the United States. Filing a flood insurance claim will not cause your rates to increase. Also, if your property is located in a high-risk flood-zone, you cannot be turned down for coverage. Flood insurance costs are based on:

  • Whether your city is part of the NFIP: If so, you can get federally subsidized coverage, which costs about half as much as coverage in non-participating cities. Rio Rancho is an NFIP participant.
  • Whether your property is located in a high-risk, medium-risk, or low-risk area: Risks are determined according to FEMA-drawn flood maps. Those in low-risk areas can get Preferred  Risk policies at much lower rates.
  • How much coverage you are purchasing: You can decide how much structural and contents coverage you wish to purchase, up to a designated limit.
  • The amount of your deductible: The higher your deductible, the lower your cost. The minimum deductible amount is $1,000.

On average, homeowners in high-risk areas pay about $700 a year for their coverage, while those in low-risk areas pay about $300 a year. Talk to an independent insurance agent to learn how much a policy will cost you.

Average Rainfall and Flooding in Rio Rancho

The city of Rio Rancho sees less annual rainfall than most of the country.

  • US average annual rainfall:  38.61 inches
  • Rio Rancho average annual rainfall:  11.63 inches

Despite these low rainfall average, however, Rio Rancho sees its share of flooding. This is because during summer monsoons, prolonged heavy rainfall can saturate the ground and overwhelm draining systems and arroyos. Also, the Rio Grande can overflow its banks, causing water to accumulate on roadways and damage homes and businesses.

This is why flood insurance is so important in this New Mexico city.

Is Flood Insurance Required in Rio Rancho, NM?

Because Rio Rancho is an NFIP participating city, if your property is located in a Special Flood Hazard Area, your mortgage lender will require you to carry a flood insurance policy. Homeowners in low- or moderate-risk areas may or may not be required by lenders to have this coverage. Once your mortgage is paid in full, this coverage becomes optional.

Whether or not you are required to carry this insurance, as a resident of Rio Rancho, you may want to give it serious consideration. Flood damage can be extremely expensive. According to FEMA, as little as one inch of water in your home can lead to up to $25,000 in damage.

Even those who are outside the designated flood zones can experience flood damage. In fact, nearly 20% of all flood insurance claims are for properties in low-risk areas. Some people think that FEMA will help them pay to rebuild, but FEMA's help comes only in the form of guaranteed low-interest loans that must be paid back. Flood insurance is a more economical solution.

What Does Flood Insurance Cover?

Flood insurance is made up of two parts: structural  coverage and contents coverage. Depending on your circumstances, you can opt to purchase just one or both types of coverage.

Structural coverage

This covers damage to your property’s foundation and to its structural equipment, including electrical and plumbing systems, water heaters, furnaces, built-in appliances, and permanently installed carpeting over an unfinished floor.

Homeowners may purchase a maximum of $250,000 in structural coverage, while businesses may purchase up to $500,000 in coverage.

Contents coverage

This covers personal belongings kept on main living floors, including furniture, clothing, electronics, portable appliances, and carpeting. It also covers items normally kept in a basement such as washing machines, dryers, freezers, and HVAC units.

Homeowners can purchase a maximum of $100,000 in contents coverage, while businesses may purchase up to $500,000 worth of coverage.

Talk to your local independent insurance agent for help determining how much of each type of flood insurance coverage is right for you.

What Is Not Covered by Flood Insurance?

Homeowners with finished basements are often surprised to learn that other than appliances normally kept in a basement, personal property in this part of your home is not covered by flood insurance.

Flood insurance also will not cover:

  • Mold and mildew removal and remediation
  • Structural damage caused by earth movement such as landslides
  • Property stored outside your home, such as lawn furniture and above-ground swimming pools
  • Damage to currency and important documents
  • Claims filed within 30 days of your policy purchase

Talk to a local independent insurance agent to learn more about the limitations of a flood insurance policy.

Why Work with an Independent Insurance Agent in Rio Rancho, NM?

You can turn to an independent agent in Rio Rancho for assistance when you are shopping for flood insurance.  These insurance professionals can serve as a useful resource for all of your coverage needs. Contact an insurance agent in Rio Rancho to learn more about flood insurance and to start reviewing customized quotes.

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