Should You Buy Home Flood Insurance?

Filed under: Flood, Insurance

Most homeowners understand the importance of homeowners insurance, but many have no idea that floods are not usually covered under their regular policy. Without separate flood insurance, you could lose everything if a flood destroys your home.

The National Flood Insurance Act of 1968 led to the creation of the National Flood Insurance Program (NFIP), which identifies areas of high flood hazard, establishes insurance rates, and helps provide insurance for structures and contents damaged in a flood.

As with all types of insurance, there are several different levels of protection. One option for many homeowners is the Preferred Risk Policy (PRP), which has a lower relative cost and is specifically for homeowners who reside in low to moderate flood risk areas. Even if you don’t think that you are at a risk for flood damage, you might want to consider this type of policy. FEMA has estimated that ninety percent of all natural disasters in the United States involve flooding, and twenty-five to thirty percent of flood insurance claims are from areas that have been designated as “low risk.”

Flood insurance is sold as a separate policy from your regular policy. If you don’t think you have it – you probably don’t. You should talk to your insurance agent or company about purchasing a policy to protect you against floods. Even if you don’t live in a high-risk flood area, it is a practical decision to at least purchase the minimum coverage to protect you in case the unexpected happens.

When you purchase a policy, it is important to know exactly what it covers, how much it is worth, and the amount of the deductible. Many policies have a waiting period before it becomes active; make sure to find out for how long this waiting period, if any, lasts.

Before you purchase a flood insurance policy, it helps to do some price comparison and research. Get several quotes and compare prices and policy coverages. Even if you are happy with your current homeowners policy and insurance carrier, it never hurts to do a little shopping to find out the best deals. If you decide to go with a new company, make sure to check for reviews, referrals, or testimonials before you sign on the dotted line.

You may not think that a natural disaster such as a flood can happen to you, but no location is one hundred percent safe from a flood. The cost to replace your home or possessions is far too great for most people. Homeowners should remember the old age – it is better to have insurance and never need it than to not have insurance and need it!

Posted on February 21st, 2014 by FloodMed

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