You Need Flood Insurance
If it can rain, it can flood: Why flood insurance is a wise bet for homeowners
(BPT) – The federal government considers floods the nation’s most common natural disaster. They strike every state and leave homeowners with huge repair costs. Why? Because typical homeowners insurance doesn’t cover flood damage and flood insurance must be purchased.
Those policies may provide protection for water damage when it comes through a hole in the roof or from wind-driven rain. But coverage doesn’t extend to damage caused by water from a storm-swollen river, torrential rainfall or other flood-inducing conditions.
Homeowners are required to purchase flood insurance if they have a federally backed mortgage and live in a high-risk flood area as identified by the National Flood Insurance Program.
For others, though, it’s optional.
With premiums starting as low as $171 a year for a home and its contents, it’s coverage homeowners should highly consider.
“Floods can occur anywhere,” says Corise Morrison, executive director of residual markets for USAA. “Low risk does not mean no risk.”
The Federal Emergency Management Agency (FEMA) establishes flood-risk ratings for areas based on hydrologic studies and other data. In high-risk areas, a 1 in 4 chance of flooding exists over a 30-year mortgage. In moderate- to low-risk zones, the chance of flooding is reduced but still present.
More than 20 percent of the NFIP’s claims come from people with property outside of high-risk areas, according to federal estimates.
USAA sells and services coverage under the NFIP. The program’s maximum coverage is $250,000 for a home and $100,000 for its contents, but USAA can refer members to a broker if additional coverage is needed. The program also provides coverage to condo owners and renters.
Homeowners can assess their risk for natural disasters plus get tips on how to minimize them and protect their personal property with USAA’s Property Risk Assessment Tool.
But don’t wait until an extreme storm is approaching to act. Normally, flood coverage won’t begin until 30 days after purchase.
Get a quote for flood insurance at USAA.com.
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9 responses to “You Need Flood Insurance”
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I found out the hard way, the necessity of having flood insurance. We had some major flooding in our area recently and did quite a bit of damage to our home. I called my insurance agent & when he got back to me, all he could say was sorry, you aren’t covered for that. He said that many years ago, The firms that make mortgages didn’t require flood insurance in many cases, but now they do.
Thanks for your comment Chris. Sorry to hear about your loss. Many years ago, because of some very severe losses, plus government intervention, lenders now require flood insurance if your property lies in a flood plain.
My husband and I just bought our first home, and the lender said that we will have to carry flood insurance. It didn’t make sense to us, but the man said that our property is located in a flood area on the map and we have no choice in the matter. After reading some of the horror stories that others have been through, it made sense.
Thanks Nancy. Yes, times have changed, and this time for the better. If a lender didn’t require flood insurance, some borrowers simply wouldn’t buy it, and if a disaster occurred, they would lose big time.
From what I was able to find out, the cost for the additional flood coverage isn’t very much. If you consider how much you can lose if you don’t have that coverage, it’s a drop in the bucket.
You’re right Carolyn. For all it costs, it definitely is well worth it. Usually, Murphy’s law is right on target.
I’m just beginning my house hunting now, and as far as I am concerned, I will definitely make sure that I have a flood insurance rider on my policy, whether the bank requires it or not. A house is a big investment and you need to protect it. It’s a low cost expense for it and it could save you a lot of trouble and heartaches down the road should you need it.
In addition to homeowners insurance, I can certainly vouch for the need for other insurance plans for things that could be effected by floods, such as car flood damage insurance. Although it is not common, I’ve heard of people buying nice looking cars, yet it would break down after they drive it for several days. Come to find out its because the car was subject to a flood in another state. Very unfortunate but very true.
You’re so right Rob. There are still some scams with shady operators selling vehicles in a flood. I’m not sure if all states now require a notation on the title if the vehicle was in a flood. Someone, I’m sure, probably has found a way around that too.