Among the most common and costliest disasters in the U.S. are floods, costing many homeowners millions of dollars nationwide. While hurricanes and rainstorms are the most usual causes of flooding, blocked storm drains, failed levees and dams, melting snow, and others could likewise trigger floods.
The question is, do you have the money to shoulder the repair costs if flooding damages your home? If not, do you need flood insurance to cover the costs?
Do You Need Flood Insurance?
First things first, take note that your homeowner’s insurance doesn’t cover flooding so you would need flood insurance coverage to safeguard your house and belongings. But not homeowners that should have this coverage actually have it, and this could be a costly mistake.
According to a top flood insurance provider in Cape Coral, the average cost of claims due to flooding is around $43,000 and damage resulting from an inch of water could cost as much as $20,000. Having flood insurance policy would cover you for this cost.
The problem is that most homeowners think that they don’t need flood insurance if their area isn’t prone to flooding. But according to the Federal Emergency Management Agency, 20% of flood insurance claims are from areas located outside the zones believed to be at high risk for floods. Also, plenty of homeowners don’t buy flood insurance because they think that federal disaster funds would shoulder the costs for them. But take note that this type of aid is given through a government-funded low-interest loan, meaning that you’d have to pay it back.
Having flood insurance coverage might also be mandatory depending on the area you live since under federal law, insured or regulated lenders should require that homeowner-borrowers with properties in high-risk flooding zones have flood insurance coverage. You might likewise have to buy flood insurance if you have previously received federal disaster aid and are still living in an area at high risk of flooding. Otherwise, the government would deem you ineligible for future disaster assistance. Additionally, some lenders might require that you purchase flood insurance coverage even if you don’t reside in a flood-prone area.
The Bottom Line
Regardless of how prepared you are for a flood, expect the costs to be higher than you expect. If you’re not that financially stable and don’t have money for emergencies, it’s best that you weigh the pros and cons of getting food insurance coverage. Flood insurance policies in areas with low to moderate risk of flooding could cost less than the average monthly Internet or cellphone bill, and could save you some money if your home gets damaged by a flood.