Over the last few decades the world has seemed to shrink. Advances in technology run rampant with cable television bringing scenes of everyday life, both good and bad, into your living room from the far corners of the globe. News reports are filled with footage of natural disasters. Forest fires, tornados, blizzards, and hurricanes occur every day somewhere on our planet. So do floods.
According to the Federal Emergency Management Agency (FEMA), flooding is consistently the leading cause of property damage in the United States. Natural disasters can’t be prevented, but you may be able to better deal with the results if you’re prepared. Getting your affairs back in order after a flood has disrupted your life can be done in a timely manner if you carry the right type of insurance.
If your home is on top of a mountain you need protection from lightening strikes, but probably don’t need flood insurance. Most anywhere else the need could arise. Even if you don’t live on a floodplain, flooding could conceivably occur. It’s just that it’s more likely in some places than in others. How do you know if you need flood insurance?
Living on a Floodplain
When your home sits along the Gulf coast within a few hundred feet of the roiling surf or on the banks of the Mississippi River mere feet above the swiftly flowing water, you clearly need to consider carrying flood insurance. As surely as the sun rises in the east there will come a time when the water will rise and probably cause damage. In some cases you won’t be able to insure your home without taking flooding into consideration–at extra cost because flood insurance is not included in the typical homeowners’ policy. The same can be said for people living along the shores of lakes, rivers, and streams throughout the country. It’s the price you pay for choosing to live where you do.
You Have a Choice
People who carry a mortgage and live in a designated floodplain may not have the option of whether or not they carry flood insurance. Whoever carries the mortgage wants to be protected in the event something happens, and in most cases will require you to have flood insurance if you live in a flood zone. On the other hand, if you rent or are a homeowner without a mortgage there is no requirement of having flood insurance. The choice is strictly left up to you. Is it worth taking a chance?
It’s Relatively Inexpensive
In comparison to other forms of homeowners insurance, flood insurance is significantly less expensive. Part of the reason for that is flood insurance is underwritten by the National Flood Insurance Program (NFIP.) A flood protection plan can be purchased from independent insurance agents, so you can probably get a policy from the same company you regularly deal with. The NFIP is under the administration of FEMA so rates are fairly consistent no matter where you live in the country. Variables apply, however, such as proximity to a floodplain. The closer you live to a flood zone the higher your rate. There is a caveat–a cap on coverage. If you want to make sure you are fully covered, the cost of your policy will depend on the extent of the coverage you choose. Consult your insurance agent to find out your options and see if you’re adequately covered.
Determining Need
If you fall into the category of flood insurance being an option and not a requirement when taking out homeowners insurance, you need to be aware of risk factors before making a decision. Does the cash outlay outweigh the potential for disaster? Fortunately there is a simple first step. Visit the Internet website www.floodsmart.gov and click on their One-Step Flood Risk Profile. If you follow the directions, you can easily determine your level of potential danger from flooding. After that’s done you can weigh the pros and cons and make an informed decision on whether or not paying for flood insurance is a good idea. If you decide it might not be a bad idea then you need to do the same homework that someone who is required to carry flood insurance has to do–ask your agent to explain the options available. An informed buyer is a smart buyer
Bailey writes about insurance and other topics for the Home Insurance Blog.