Figuring flood insurance into financing cost
We recently had a sump pump fail during a rainy weekend. Never had more than an inch or so of water on the floor.  Total cost to remove the water, dry out the basement, and repair the damage to the paneling and wallboard: more than $7,000 plus the new sump pump. We are not in a flood zone.  In a flood zone the cost of the loss could be total. A flood is also the type of hazard that can also destroy the value of land.  No way I would want to self insure for this known hazard. Self-insure a $250K+ house that's deemed to be in a flood zone? Wake up, have coffee. If you don't change your mind, have another cup.
GetApproved Motor Finance is trusted in Australia to provide a convenient, fast &amp; low cost service to obtain car finance in Perth. They help you compare car loan &amp; provide low rate car insurance. Jeremy Hughes Perth is a founder of GetApproved Finance, a online car lending provider. Jeremy is a good entrepreneur with skills in Business Planning, Strategic Planning, Marketing Strategy, Consumer Financing etc. While it is true that homeowners insurance will cover emergencies, it is very important to check and make sure that your policy is covering everything that it needs to. A great example is what happened to all of those without flood insurance in Tennessee last year. You may opt not to get additional coverage, but then you should make sure that you are setting aside funds for such a catastrophe. There is not necessarily a need to prevent what you describe - 'turning insurance on before high risk situations'. They just need to calculate the premiums accordingly. For example, if an insurance needs to take 50$/year for insuring your house against flood, and a flood happens in average every 10 years, if you just insure the two weeks in the ten years where heavy rain is predicted, you might pay 500$ for the two weeks. The total is the same for the insurance - they get 500$, and you get insurance for the dangerous period. In the contrary; if a flooding (unexpectedly) happens outside your two weeks, they are out. From the home owners view, 500$ for two weeks when heavy rains and floods are expected, and nothing otherwise sounds pretty good, compared to 50$ every year. It is the same of course, but psychology works that way. This might be a bit of r/conspiracy thinking but:  DOL fiducary rule has siginfcatly altered investment companies ability to make money on qualifed accounts. Many are still struggling to figure out how to adopt, monitor and be in compliance with it. This will hit the insurance companies hard too especially variable annuities providers since it is that much more difficult to justify their high cost products for rollovers unders DOL.   If you reduce the limit to 2,400 people are going to have to find other places to put money to continue to save.  If you already saving 18,000 or 10,000 or 5,000 a year your going to need a new place to put that money.  What other products are there that are tax deferred for non qualifed money? after tax annuities.   And since these dollars are no longer in qualified plans they are not subjected to the DOL fiducary rules.    If a variable annuity company comes out with a hybrid Qualified / non qualified account that allows you to have one contract with two accounts in it, the fix is in.  So maybe the insurance companies or the financial services companies lobbying groups or supported think tanks came up with the idea and served it to the government.   My tin foil hat is bolted on. "&gt; So depending upon location it can be incredibly inexpensive.  Yeah, places where it isn't going to flood.  I have something like $8k flood coverage with $5k deductible on an elevated condo unit, and it is about $450/year. As a city official told me, ""if that place gets flooded, we're all dead."" And yet here I am throwing away money due to shitty regulations." There are several factors here. Firstly, there's opportunity cost, i.e. what you would get with the money elsewhere. If you have higher interest opportunities (investing, paying down debt) elsewhere, you could be paying that down instead. There's also domino effects: by reducing your liquid savings to or below the minimum, you can't move any of it into tax advantaged retirement accounts earning higher interest. Then there's the insurance costs. You are required to buy extra insurance to protect your lender. You should factor in the extra insurance you would buy vs the insurance required. Given that you can buy the car yourself, catastrophic insurance may not be necessary, or you may prefer a higher deductible than your lender will allow. If you're not sufficiently capitalized, you may need gap insurance to cover when your car depreciates faster than your loan is paid down. A 30 percent payment should be enough to not need it though. Finally, there's some value in having options. If you have the loan and the cash, you can likely pay it off without penalty. But it will be harder to get the loan if you don't finance it. Maybe you can take out a loan against the car later, but I haven't looked into the fees that might incur.  If it's any help, I'm in the last stretch of a 3 year car loan. At the time paying in cash wasn't an option, and having done it I recognize that it's more complicated than it seems. If you know the amounts that were combined ($5,000 and $7,500 in your example) -- NOT the original loan amounts necessarily -- then you can calculate a payment schedule (in Excel, Google Sheets, online, etc.) using that amount and the interest rate.  You can then apply your payments ($100) to that payment schedule, making sure to either accrue interest if your $100 didn't cover the monthly payment, or pay down extra principal if your $100 more than covered the payment.   The outstanding principal is the amount left or remaining balance. A program like GnuCash or Quicken makes doing the payment schedule, and applying payments relatively easy to handle.  Spreadsheets will require you to have 36 lines (3 years x 12 months) of payment and recalculation detail, but that shouldn't be too much work. To be fair to your mother, make sure you include any partially accrued interest on the full balance when paying it off.  Or even better, include a full month's interest in the pay-off amount. "This is the best tl;dr I could make, [original](https://www.cato.org/publications/policy-analysis/reforming-national-flood-insurance-program-toward-private-flood) reduced by 98%. (I'm a bot) ***** &gt; The National Flood Insurance Program was established by the National Flood Insurance Act of 1968, with the intent of reducing the need for post-disaster federal aid by offering flood insurance and providing mitigation incentives to properties that have significant flood risks.  &gt; The 2014 Wharton School research outlined earlier demonstrated that private insurance firms have the technical capacity to price insurance more accurately than the NFIP. A proliferation of private insurance offerings could thus lead to savings for those NFIP homeowners who are currently paying overpriced premiums because of overly broad risk aggregation.  &gt; Congress took a major step in 2012 toward normalizing private flood insurance by requiring that federally backed lenders accept private insurance, but legal impediments to private flood insurance penetration remain.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6z4pad/reforming_the_national_flood_insurance_program/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~207249 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **Insurance**^#1 **NFIP**^#2 **Flood**^#3 **private**^#4 **risk**^#5"