Some of my customers might ask do I need Flood insurance and unless your bank requires it Flood insurance is one of those things you might not think about -- until you’re knee deep in muddy water in your living room.
At that point, it’s too late. If you did not previously purchased Flood insurance you will be left with moldy furniture, ruined flooring, and probably a big replacement cost, that you will end up paying for yourself; but you’re not alone though. 87% of homeowners don’t have a flood insurance policy.
Many of us have common misconceptions about flood insurance and a recent article published by Farmers Insurance points out a few facts. So let’s clear some of those up:
"Misconception #1: You don’t need flood insurance unless you live in a flood-prone area.
Not true. Your property may be at risk. Heavy rainfall, melting snow, or tropical storms can all cause flooding, and floods happen more often and in more parts of the country than you think.
Granted, some areas (coastal cities or towns that get pummeled by hurricanes) are more vulnerable to floods than others. But just because you haven’t been hit by floods before, doesn't mean you never will.
It’s a good idea to look into flood insurance no matter where your home is located -- whether that means you live in an area with little rainfall, miles away from swelling rivers and lakes, or in a zip code that falls safely outside a flood zone.
In fact, over the last 5 years, all 50 states have experienced floods or flash floods.
Misconception #2: Homeowners insurance covers flood damage.
Not true. When it comes to your typical condo or homeowners insurance policy, all types of water damage are not covered.
While most homeowners insurance policies may cover water damage from a burst pipe, flood damage is not usually covered.
Understanding Flood Risks and Insurance Requirements in Your Area
You may not realize it but even a minor flood can cause serious property damage within a matter of minutes. Actually, floods destroy or damage more homes than any other weather catastrophes in the United States.
Depending on where you live, your flood risk can be high, moderate or low, and your insurance rates and requirements are decided based on your flood zone:
- High-Risk Areas
There’s a 1 in 4 chance that a home in a high-risk zone will flood. That’s why homeowners in these areas are typically required to carry flood insurance by their lenders. Usually, they qualify for a Standard Risk Policy.
- Moderate-to-Low Risk Areas
The threat of flooding in these areas is not as high.
Even so, flood insurance may be something to consider, because residents in these areas have filed about 25% of all National Flood Insurance Program claims. Usually, homeowners in low-to-moderate risk zones can qualify for a low-cost Preferred Risk policy.
If you’d like to learn more, you can assess your neighborhood’s flood risk by using the FEMA Flood Map Tool. However, your Farmers agent is a great resource to help you:
- Evaluate your property’s flood risk.
- Find out which flood insurance policies you’re eligible for.
- Get covered the way you want, if you’re a condo owner or renter.
- Make an informed decision on flood insurance and understand what it covers.