Jan 07, 2015
Are you debating between investing in flood insurance and taking your chances without it? Sometimes paying insurance premiums can feel like throwing money away, but whether you live in a low-risk area in the desert or in a high-risk area, such as coastal Florida, flood insurance isn’t a waste of money—it is an essential investment. According to FEMA, flooding is the most expensive and most common natural disaster in the United States. Considering we all live close to the coast, flood insurance is a must have—here’s why:
You might assume your homeowner’s or commercial insurance policy protects you from flood or water damage—but look again. Most insurance policies do not. This means in the event of a flood, you have no coverage without a flood policy.
Often after a disaster occurs, the government steps in to help—why can’t you rely on this assistance?
If you don’t own your property, flood insurance is likely mandatory according to the terms of your loan. A common misconception is that people think they are not in a flood zone, but the truth is every single property is in a flood zone and it's just a matter of what zone you fall into. The only difference between a low and high risk zone is the cost of the flood insurance - just because you live in a low risk zone doesn't mean your property won't flood. In fact, it's likely if anyone floods everyone will flood given where we live.
Even if you live in a low-risk area, a tiny bit of water can still cause a lot of expensive damage. You might live somewhere prone to water damage, or near a little canal that has never flooded before, but either way the cost of flood damage is always significant. According to the NFIP, just 12 inches of water can result in $27,000 of damage to a 1,000 square foot home. The average flood damage claim is over $38,000.
Flood insurance is an investment that is absolutely worth making. It will provide you with peace of mind, and the much needed assistance in the not so unlikely event you find water where it doesn't belong.