Flood Insurance - Do I Really Need It?
If you live in any part of the world that regularly experiences flooding, then flood insurance is a necessity. Floods can be devastating to homes and lives, but they are not always covered by home insurance policies. If you plan on buying a home, or if you already have one and want to make sure that it is properly protected in case of flooding, then flood insurance is something you will need to purchase.
You’re probably thinking to yourself, “I don't live near any rivers or lakes. I don't live in a flood zone. I don't need flood insurance." But you might be surprised to learn that floods are the most common type of natural disaster in the U.S., killing more people than any other type of natural disaster and causing more property damage than tornadoes, hurricanes and earthquakes combined. In fact, flooding is the leading cause of catastrophic damage to homes according to FEMA; over 30% of all flood claims come from homes with no history of previous flooding incidents!
The truth is most homeowners underestimate their risk for flooding because they simply don’t think it could happen to them—until it does.
How Can You Tell If You Are in a Flood Zone?
There are a few simple ways to find out if you live in a flood zone. If your home is located in a flood plain, or if you have a federally backed mortgage loan and it's located in an area that's designated as high risk for flooding, then yes—you should purchase flood insurance.
A residential property is considered to be at risk of flooding if it has been mapped by FEMA as being within the 100-year floodplain. The 100-year floodplain is the area of land where there’s a 1% chance of flooding every year.
If you have any questions about whether or not your home falls into one of these categories, contact your local FEMA office or county assessor’s office to inquire further about what type of insurance coverage would best suit your needs
Types of Flood Insurance
The first step to determining whether or not you need flood insurance is to understand what it is. Flood insurance policies are either federally subsidized or privately issued and can be broken down into two main categories:
1. National Flood Insurance Program (NFIP) - This type of policy is issued through the Federal Emergency Management Agency (FEMA), and covers up to $250,000 in damages. They're good for flooding, fire and other disasters that meet their criteria (more on those later). The premium you pay will depend on where you live and how much coverage you want; the higher your premium, the more likely your property will be covered if something happens. If you don't have flood insurance but are at risk for floods due to river overflow or tidal surge during a storm event like Hurricane Matthew, then this may be a good option for protecting yourself from disaster losses even though it's not mandatory.
2. Flood Insurance Policy (FIP) - These policies are private-issued policies specifically tailored toward homeowners who want protection against damage caused by rising water levels during extreme weather events such as hurricanes or tsunamis; they tend also include coverage against earthquakes because many earthquakes cause flooding as well! While NFIP was designed solely around catastrophic events like major hurricanes hitting land areas without warning offshore islands nearby would still need some kind of protection plan in place before any natural disaster strikes them unexpectedly so having both options available lets people choose which one works best depending on their specific needs—but there's no reason why someone couldn't choose both types too just because they wanted more peace-of-mind about being prepared ahead of time when possible... unless there wasn't enough money left over after paying all those other bills each month!
Cost-effective Flood Insurance
If you own a home and live in a flood zone, it can be hard to know whether or not you need the extra coverage. The good news is that most insurance companies will give you the option to purchase a policy for less than $300 annually. If you're worried about rising costs due to climate change, consider adding a deductible of 10% or more. This will lower your premiums but still cover some of your losses if flooding occurs. If you already have homeowners' insurance, talk with an agent who specializes in flood protection and/or check out our state-by-state guide below for more details on what's available where you live!
The more you know about flood insurance the better you'll be able to protect yourself and your family.
If you live in a flood-prone area, flood insurance can be an important part of your overall financial strategy. It's also a good idea for anyone who has a federally backed mortgage or whose local government requires that they carry flood insurance on their property.
While it's not mandatory, many homeowners are surprised to learn that the majority of people with mortgages do not have a policy in place. If you don't have one, it's likely because you've never thought about it before—but now is the perfect time to start thinking about how having this coverage could protect both yourself and your home from significant damage if disaster strikes.
Flood insurance is an important part of your overall financial strategy. It can protect you from having to pay for damage that could result from flooding, which can be substantial and life-changing. Knowing more about flood insurance will help you make an informed decision about whether it's right for you and your family.