Things To Know About Flood Insurance

Many individuals have questions regarding flood insurance in the wake of the recent spate of storm devastation, and there is a lot of inaccurate information available.

Here are a few things to think about while looking into flood insurance.

Flood Damage Is Covered by My Homeowner's Insurance

To the best of my knowledge, flood damage is not currently covered by any homeowner's policies. It is a separate policy to cover flooding.

"Through your insurance provider or another business that has a partnership with the National Flood Insurance Program, you might be able to purchase the coverage (a separate policy). If the coverage provided by the government program is insufficient or the cost is too high, you might need to turn to some private organizations that provide insurance outside of the NFIP "JJ Montanaro, a financial advisor with USAA, said.

Flood Damage Is Covered by My Renter's Insurance

It could. Your goods in a flooded property may be covered by some renter's insurance policies, notably those provided by USAA.

My mortgage company does not require me to purchase flood insurance, so I don't need to

Even if your mortgage company doesn't mandate it, many people—possibly even most people—should get flood insurance. Similar to your auto insurance, there is a minimal level of coverage and then there is the level of coverage you really need, which is likely higher than the minimum.

Consider flood insurance carefully if you won't be able to afford to rebuild your home in the event of a flood.

I'll just wait to purchase insurance until there is likely to be a flood.

The typical waiting period before the policy takes effect is 30 days. The floodplain maps can be changed or updated, as well as "in conjunction with the making, expanding, extending, or renewing of a loan," as exceptions. (Taken from the website FEMA.gov.)

The Cost of Flood Insurance Is Too High

Unbelievably, the majority of individuals pay unrealistically cheap premiums for flood insurance compared to the risk covered. The following regulations ensure that premiums remain low: limits on increases, a restriction on "full risk" premiums, and rates based on erroneous or outdated maps.

"The average premium, according to the federal government, is roughly $650 annually. You can use that amount as a case study for insurance and risk management if you compare it to the possible losses due to flood damage "explained Montanaro.

I won't bother because it's too late to purchase flood insurance.

If you require flood insurance now due to the possibility of a storm approaching your area, you also require it tomorrow. Just because a storm is developing doesn't mean that your total danger changes. Make purchasing the necessary insurance motivated by the current threat.

Never Will My House Flood

I suppose that depends on how you define a flood. The National Flood Insurance Program and the majority of insurers adopt the following definition:

"A flood is a general, transient condition characterized by the inundation by water or mudflow of two or more acres of typically dry land or two or more properties."

Where the water comes from is irrelevant. When a major storm caused the nearby storm drain to become plugged, my mother's home flooded.

A crucial component of your comprehensive catastrophe management strategy should be flood insurance. Consider carefully how you'll recover in case the water comes if you decide not to get it.

Do not wait till a theft or emergency to act.

Be prepared and safeguard your investment. Visit the Military.com Insurance Center for more details.