What Is Flood Insurance and Do I Need It?
Floods are one of the costliest natural disasters that happen in the United States. In fact, the average flood causes as much as $4.6 billion in damage.
The best thing homeowners can do is insure their homes against flood damage. However, your homeowners’ insurance policy isn’t enough to protect your home against flood damage.
You need dedicated flood insurance to protect your investment. If you’re like most homeowners, you’re asking yourself, “what is flood insurance and is it really necessary for my property?
Here’s what you need to know to make the best decision for your home.
What Is Flood Insurance Exactly?
Flood insurance is a supplemental insurance policy that protects your home from damage due to floods and flood-related water damage. The coverage only applies for floods resulting from inclement weather.
This means floods caused by heavy rainstorms, hurricanes, dam failures, and even storm surges are all covered under the insurance policy.
The insurance policy will help offset or completely cover the cost of repairs to your home and property as well as help pay for any replacements for items damaged as a result of the flood.
Once you buy coverage, your property will be safe as long as you pay your insurance premiums on time. If you miss a payment or fail to pay your premiums in full, your insurance coverage will lapse. When this happens, you’ll have to pay for the full cost of repairs or replacement items out of pocket.
What Does Flood Insurance Not Cover?
Flood insurance only covers damage related to floods caused by storms or equipment failures outside of your control. The policy won’t protect your home from damage due to sump pump failures, burst pipes, or any other interior water damage not caused by flooding.
That’s why flood insurance is considered a supplemental policy. It can never be a substitute for your standard homeowners’ insurance coverage.
If you have any other type of water damage on your property, you’ll need to file a claim with your homeowners’ insurance provider. They’ll be able to help you pay for the cost of repairs due to non-flood related events.
Keep in mind that the details of your coverage will vary based on the type of policy you have. Make sure to read up on the details of your insurance policies ahead of time. This way, you’ll know who to talk to and what types of damage you’re protected against before you need to file a claim in the first place.
Do You Really Need to Buy Coverage?
Believe it or not, floods can happen without warning and they can happen in almost every part of the country. Investing in flood insurance coverage is one of the easiest ways to protect your home.
If you’re not sure if coverage is in your best interest, think about the average flood risk in your area. If your home is near a body of water or in an area where flash floods are common, flood insurance is an absolute must.
However, if your home is high up on a hill and not near any large bodies of water that could flood, you may be able to delay getting coverage. The best thing you can do is speak with your insurance agent about your options and your risks.
They’ll be able to assess whether your home needs flood insurance or if you can delay getting coverage for a while longer.
How Can You Find the Best Policy?
When you’re ready to buy flood insurance, the best place to start is by speaking with your trusted local insurance agency. They’ll know which policies are best suited for your needs based on the unique risks associated with the area.
It’s okay if you shop around for coverage and take your time deciding on the best policy for your home. If you do, get quotes from at least three insurance providers and compare the quotes in detail. Look at the overall costs associated with the insurance policy and how much coverage you get for the money.
You’ll want to choose the insurance provider that offers you the best quality coverage at a reasonable price. Keep in mind that the best policy may not be the cheapest one on the market.
Will Flood Insurance Change Property Values?
One of the most common misconceptions about flood insurance is that homeowners who invest in the policy will somehow lower the value of their property. Though it might seem like insuring your property against a certain risk means you’re admitting it’s in a high-risk area, that doesn’t mean you’ll lower your property value.
Instead, you’ll end up protecting it in the long run. If anything does happen to your home, your flood insurance will help pay for the cost of repairs. The nicer your home’s condition stays, the more you’ll preserve its property value.
Without the insurance in place, you may be tempted to cut corners on repairs to save money. Those inadequate repairs can and will decrease your home’s value and make it harder to sell the property in the future.
By investing in flood insurance, you’ll show prospective buyers that you’re a responsible homeowner. If your home gets damaged by a flood, you’ll be able to get it repaired properly so you can ask for the highest sale price possible should you end up moving in the future.
Make Sure You Get the Best Coverage Possible
If you’ve been asking yourself, “what is flood insurance, and do I really need it?” this guide should give you the answers you’ve been looking for. Investing in flood insurance is a simple and affordable way to protect your home from damage.
Just make sure to shop around and choose a comprehensive policy that fits your budget without cutting any corners. This way, you’ll have high-quality coverage in place if a flood does strike your area.
