Dramatic shifts in weather are expected to continue into 2019, with rising tides and fearsome hurricanes on the horizon. Many Americans are still learning to adjust to such weather conditions.
Being prepared in case of disaster is important. The well-being of your family, your home, and belongings can and should be your highest of priorities. But there are steps you can take to prepare for such disasters.
Insurance is one such step. You may have asked yourself before: “should I get flood insurance?” The answer will vary from person to person and rely on a number of factors. Below, we’ll walk you through eight key facts that can help you decide if flood insurance is right for you.
1. Floods Can Be Incredibly Expensive
According to data from the Federal Emergency Management Agency (FEMA), floods are both the most common and costliest of natural disasters. The costs of flood damage can be astronomical.
Even one inch of water damage in a home can cost a homeowner up to $20,000!
Without flood insurance, a homeowner can be on the hook for the full cost of such damages. As you can imagine, these costs can become almost too much to manage.
2. Flood Risk Levels Change
Many homeowners that forgo flood insurance do so because they live in a low-risk flood zone area. What most homeowners don’t know, however, is that the zoning of these flood maps is susceptible to rapid change.
Everything from changing weather patterns to new construction could completely alter that risk status of a neighborhood. If you’re not keeping up with the risk diagnosis of your neighborhood, it could change without you realizing.
FEMA updates their flood maps yearly and they can be a great resource for homeowners.
3. FEMA Offers Flood Insurance
Many homeowners without insurance don’t know how to start the process of getting it. If you’re a home located in the 21,000 communities that FEMA covers, you can actually get insurance directly through them.
This is insurance is under the National Flood Insurance Program. It takes only 30 days to get into effect once signing up. Non-federal insurance agents can sell NFIP insurance, and you can contact your local office to get signed up.
In most cases, NFIP insurance is cheaper than the insurance you’d find through a private company.
4. There Are Multiple Types Of Coverage
NFIP and most forms of flood insurance cover two areas. In most cases, you will be eligible for and want to get both. They are building property and personal property.
Building property coverage handles repairs to your home. It is a ‘replacement cost value’ coverage, meaning it covers repairs to your home of up to $250,000. Damage to the infrastructure of your home is covered under such a policy. Any personal belongings damaged in the flood would not be.
For that, you’d need personal property coverage. It is exactly what it sounds like. If you have personal belongings damaged in a flood, the insurance will cover the cost of those items. The items will be evaluated at their ‘current’ cost, which means depreciation is taken into account.
5. Flood Insurance Does Not Cover…
There are some exceptions to this rule, but in most cases, flood insurance will not cover areas of your home that are below ground. This means that any and all basements are out of coverage, whether you’ve converted them into fancy bedrooms or not.
Flood insurance also does not cover damage from mold, mildew or moisture. Though these are similar types of damages, they don’t fall under the category of “flood.”
Features outside of your home, including trees, decks, porches, and the like, are also not frequently covered by flood insurance.
6. Advantages of Private Insurance
Flood insurance from private providers is almost always more expensive. But if you can stomach the cost, it can come with a number of advantages.
For one, there’s a shorter wait for the insurance to become active. Some private insurers can have your policy in effect in a week’s time. This can be huge if you’re trying to last-minute protect your home from an incoming storm.
Coverage limits are typically higher from a private insurer, and many insurers provide a number of additional benefits to incentivize homeowners.
This includes purchasing additional coverage for areas that a standard policy wouldn’t normally cover. See page for more examples of what a private insurer can offer.
7. Decreasing Risk In Your Home
Like all insurance policies, the amount you pay is based on perceived risk. There are a few steps you can take to decrease the perception of risk in your home, and thereby lower your premium.
One way is to increase your deductible, which can ease insurance companies up and encourage them to lower your premium. You can also reduce the risk of damage by floodproofing different areas of your home.
Anything you can do to show an insurance company that you’re taking the risk of flood serious can help to lower your premiums.
8. Don’t Be Afraid To Compare Rates
Like when shopping for all forms of insurance, it’s important to stay open and do your research. Never assume the insurer you’re currently with necessarily has the best rate for you.
Don’t be afraid to get quotes from competing insurance agents and make sure you’re getting the best deal possible. Comparing what NFIP and private insurers can offer you can make you’re getting the best bang for your buck.
Should I Get Flood Insurance?
It’s an incredibly important question to ask. By taking a close look at your risk levels and the cost of insurance, you can make a decision that’s right for you. With the above information on your side, answering the question of “should I get flood insurance?” should be as easy as pie.
Need more risk management advice, tips, and tricks? Check out our blog for more.