Flood Insurance

<b>Why gamble with your home? If you do not have a flood insurance policy that&#8217;s exactly what you&#8217;re doing.</b>

Why gamble with your home? If you do not have a flood insurance policy that’s exactly what you’re doing.

Whether you live in a flood-prone zone or not, your home can always suffer damages due to rain. What if it rained for a few days in a row flooding the entire city? There have been plenty of instances where cities were streets were submerged underwater for days. Such rain could easily damage your home or the contents inside it. Why take such a huge risk?

Reasons to SERIOUSLY consider Flood Insurance

  • A standard home insurance policy does not cover losses from flooding.

This is a compelling reason to purchase flood insurance. Standard home insurance covers your dwelling, personal property, and injury or damages to your or someone else’s property, but it does not provide earthquake or flood insurance coverage. To secure yourself from damages caused to your home due to flooding, you are obligated to buy additional coverage.

  • No FDIC backed bank will provide you with a mortgage for a home located in a flood zone without it.

If the lender you are obtaining your mortgage from is a FDIC backed bank (and in almost all scenarios you want to make sure it is) then they are going to require you to have flood insurance.  The government hasn’t yet made it mandatory to have flood insurance coverage in any state if your mortgage is paid off or if your loan is through a non-FDIC backed bank, but they do make FDIC banks require the homeowner to have a flood insurance policy in place in order to loan the borrower money if the dwelling resides in a flood zone.  A lender will have to incur a heavy penalty if they choose not to abide by this rule.

  • The cost may be much less than you think.

The average policy premium is about $600 a year. For just $50 a month, your insurance company will cover you for all the damages incurred by your home during a flood. By purchasing a flood insurance policy the risk/reward factor is heavily in your favor. 

  • 20-25% of all economic losses occur in areas not designated as flood-prone.

Per the U.S. Weather Department, a staggering 20-25% of all economic losses happen in areas not designated as flood zones.  The weather department blames urban drainage for the floods caused in non-flood-prone areas. They also concluded that the flooding occurred by the flaws in urban drainage systems happens more quickly and usually to greater depths. So, not residing in a flood-prone zone should not be an excuse for not having a flood insurance policy.