Water is a powerful force in nature. It shapes the landscape of the United States and the world in many ways. It's a necessary part of life – after all, human bodies are up to 60% water.
But water isn't always welcome. Flooding is among the most destructive natural disasters. It can ruin homes, destroy businesses and take lives.
As a homeowner, keeping your property safe is a top priority. And that includes taking preventive action against the risk of flooding. But many property owners don’t realize flooding damage isn't covered by a traditional homeowners insurance policy. If you want to guarantee safety and security for your home and your family, flood insurance may be the solution.
What Is Flood Insurance?
Somewhat surprisingly, the vast majority of standard home insurance plans don't cover the effects of flooding, and most homeowners don't learn this until it's too late. Flood insurance coverage is typically provided on a policy separate from traditional homeowners insurance.
Flooding doesn't include just any water damage, though. Rather, the NFIP (National Flood Insurance Program) defines flood damage as:
- Overflow of inland or tidal waters
- Rain and accumulation of surface waters from any source
- Breakdown of land along the shores of a lake or similar body of water
Unlike standard insurance options, which are sold through private companies, primary flood insurance is most often sold by private insurance companies using the government's National Flood Insurance Program with policies capped at $350,000. Supplemental policies are available for those with property and possessions in excess of this amount as well, providing numerous options to incorporate coverage for flooding into your insurance portfolio.
Why Does Flood Insurance Matter?
Simply put, flooding can happen to in a wide range of regions, no matter the time of year or the local weather patterns. While some areas are more likely to see flooding than others, many properties can experience a devastating flood.
And if you think you're not at risk, think again: more than 20% of flood insurance claims come from low and moderate risk level areas. Tragically, only 12% of Americans choose this vital protection, putting countless properties at risk each and every year. The government does provide assistance in case of significant disasters. But many homeowners do not realize that this funding comes with strings attached. Most federal aid for natural disasters is available in the form of loans with interest.
Do You Need Flood Insurance?
Do you have $30,000 set aside to spend on repairing flood damage? The average amount of a standard flood claim, this expense could put countless families in financial jeopardy from coast to coast.
If you have a home and are located in any area in the country that is subject to heavy rains, near a volatile body of water, or in a flood plain, it’s prudent to consider flood insurance.
For those living in a flood plain, flood insurance is generally required by mortgage companies. So the purchase decision may not be up to you. Even if you are not required to buy it, flood insurance can still be a small investment to protect against the risk of big losses.
Check with your independent agent to help determine what risks you face and protection you need.