10 Flood Insurance Facts You Need to Know
About 75,000 Americans are now affected by floods each year. Whether or not this is man-made, one thing is for sure: you can safeguard yourself through flood insurance.
Below are ten flood insurance facts that you absolutely have to know:
No place is 100% safe from floods.
People usually think only those who live in flood zones or close to bodies of water, need flood insurance. Truth is, as long as you get rain or snow, or your drainage infrastructure is inadequate or not working properly, you’re at risk.
Flood insurance is offered everywhere.
Many people think that just because their area rarely gets flooded, they can’t buy a policy. What they’re unaware of is that no matter where they live, there are many insurers, both online and offline, that are willing to protect them.
Homeowner’s policies do not protect against floods.
Non-renters usually have homeowners insurance, which is often even required if you’re paying mortgage. Note that this policy will not cover floods, so you’ll need a separate one for this.
Flood insurance is among the most affordable types of policies around. For instance, you may only have to spend $500 annually to insure a property worth $60,000-70,000.
Low-risk policyholders can receive discounts.
If you live in a place with low susceptibility to floods, your policy can even be cheaper – imagine a couple hundred dollars yearly if you own your home and under a hundred if you’re renting it.
There’s a waiting period (as with most other insurance policies).
Flood policies often have a month-long waiting period before protection takes effect. This is how insurers protect their interests against those who want coverage when a flood is close at hand.
Flood insurers also protect businesses.
If you’re a business owner with expensive assets housed in a non-residential building, flood insurance can offer you protection for these. To protect such assets, a flood policy may provide up to a $1 million coverage.
In some locations, flood insurance is actually a must.
If you live in a flood zone and you’re financing a property, flood insurance may actually be a requirement by your mortgage provider. Clearly, this is to safeguard the home where they have equity.
Flood insurance is highly flexible.
Flood insurance has no fixed rate and can instead be purchased based on the value of the assets you want to protect. Larger value means larger premium.
Federal disaster relief is hardly sufficient – if at all given.
Finally, the federal government may bring relief during floods, but only after the president has actually declared the incident a federal disaster. Unluckily, such a declaration happens only 10% of the time, so most people affected will have to seek relief on their own.
Floods are a real threat to life and property, so getting protection is always worth the cost. However, policies and insurance companies can differ widely, so go through your options thoroughly before making a choice.