Why Flood Insurance Coverage Is A Necessity

Hurricane season is here! Many homeowners realize too late that their homeowners insurance doesn’t cover the expense of flood damage – whether caused from a hurricane, an overrun creek, or even just heavy rain.

To protect against the cost of expensive flood damage, homeowners actually need to purchase separate flood insurance coverage. These policies can be purchased through your insurance agent, or directly from the National Flood Insurance Program.

Every area of the United States is classified by the Federal Emergency Management Agency (FEMA) as a low, medium, or high-risk flood zone. Naturally, most coastal areas and low-lying areas are flagged for high-risk of flooding. If you live in a high-risk area, consider flood insurance a must. The relatively low investment is worth the savings should flooding occur.

What does most flood insurance coverage look like? The average flood insurance policy costs less than $700 a year, and typically covers homeowners for up to $250,000 for property and $100,000 for contents within the home. Often, within this content pricing breakdown are categories of coverage. For example, a flood insurance policy might state that it covers up to $3,000 in electronics. If you have well beyond $3,000 in electronics in the home, you may want to work with your agent to find an additional policy to cover the excess costs.

There are more exceptions to get keen to. Unfortunately, flood insurance won’t cover all the potential property damage that can result from a hurricane.

Flood insurance doesn’t cover damage if the water comes from inside the home. Water must specifically come from the outside. That means if a pipe bursts, it can’t be considered a consequence of flooding, even if the pipe burst happened during a hurricane. Additionally, while a swimming pool is technically “water from the outside”, leaks from a swimming pool aren’t covered in a flood insurance policy either. Floods are also specifically defined as covering two acres of land or affecting at least one other property. If you have a small retention of water in your 1-acre backyard, it won’t be considered a flood by your insurance agency.

While flood insurance does cover most contents damaged or lost in a flood, it specifically does NOT cover any money, valuable metals, or stock certificates. Flood insurance policies also often don’t cover possessions stored in a basement, because basements are inherently at risk for flood and homeowners acknowledge the risk when they build or buy a home with a basement.

Keep in mind that unlike other types of insurance, a flood insurance policy doesn’t take effect the day it’s purchased. Flood insurance kicks in 30 days after it’s purchased, which means that if you’re in need of flood insurance this hurricane season, now is the time to acquire a policy.

The more you know about what type of coverage is best for your property, the more prepared you can be (and the more money you’ll save) should a natural disaster occur. To speak with an insurance professional about options for flood insurance, reach out to the experienced team at Schechner Lifson Corporation.