Understanding Flood Insurance: Why You Might Need It
WARNING: This column could cost you somewhere between $150 and $700 — or save you much more.
For decades, I have operated under the mistaken notion that I don’t need flood insurance because I don’t live on or near a floodplain.
Have you always thought that, too?
In light of recent flooding horrors along the Guadalupe River, I looked for the first time at a national floodplain map — online at the FEMA Flood Map Service Center — which I easily found with a quick web search. Typed in my address and voila.
Watchdog Alert
Why Flood Insurance is Important
Even though I don’t live in a floodplain, down the street a few blocks away is a tributary feeding into a creek. There’s a small bridge over it that we use when we walk along the subdivision’s trail. In heavy rain, I could imagine the water rising.
Sure, I may not live directly in a floodplain but that doesn’t guarantee anything.
Texas’ Insurance Department Recommends
I was surprised to learn that the Texas Department of Insurance recommends that both homeowners and renters buy supplementary flood insurance.
TDI’s unofficial slogan is, “If it can rain, it can flood.”
And if you live in a floodplain, it’s usually required to buy to protect the lender.
How about the rest of us? With rising property assessments, mortgage or rental payments and regular property and auto insurance, there’s not a long line of buyers for one more expense.
Limits and Rules
There are a lot of limits and rules for flood protection. For instance, a flood insurance policy, according to TDI, will cover your home up to $250,000.
You need a second flood policy that covers possessions up to $100,000.
A most important rule: If a bad storm is coming, you can’t rush out and buy insurance. There’s a 30-day waiting period from the day you sign up and pay.
As with all insurance policies, there are some important exceptions. Flood policies don’t cover broken pipes, plumbing overflows or rain entering your house through a wall, window or roof.
Regular homeowners’ policies cover damages from fire, lightning, wind, theft or hailstorms, TDI says.
“Generally, Texas is a flood zone,” the Texas Insurance Information Portal notes on its website.
It continues, “In Texas, it has been estimated that as little as one inch of water can cause $25,000 in water damage to your residence.”
Do I Need Flood Insurance?
The government-run Federal Emergency Management Agency works with the National Flood Insurance Program.
NFIP works with many insurance companies to offer flood insurance to homeowners, renters and business owners, according to FloodSmart.gov — a government website.
“Since 1 of every 3 claims comes from low-moderate risk zones, flood insurance is strongly recommended for your property,” FloodSmart notes on its website.
So the question is: Do I need flood insurance if I’m not in a flood hazard area?
FEMA says, in general, 40% of flood claims are for homes outside flood hazard areas.
Prices Vary
Similar supplementary insurance is needed in separate policies covering tornadoes and hurricanes. Something else I didn’t know.
My insurance agent showed me several policies for flooding, ranging from the lowest at $550 and the highest, with adjusted premiums, at $707. I checked with other companies and premiums were wide-ranging.
The way to reduce the cost of the policies is to increase the deductibles.
Visit with your licensed insurance agent to learn more.
Conclusion
Flood insurance is an important consideration for homeowners and renters, even if they don’t live in a floodplain. With the risks of flooding and the potential costs of damage, it’s essential to understand the options available and make an informed decision. By learning more about flood insurance and its benefits, you can protect your property and finances from the unexpected.
Frequently Asked Questions
Q: What is flood insurance?
A: Flood insurance is a type of insurance that protects your home and belongings from damage caused by flooding.
Q: Do I need flood insurance if I don’t live in a floodplain?
A: Yes, flood insurance is recommended even if you don’t live in a floodplain. According to FEMA, 40% of flood claims are for homes outside flood hazard areas.
Q: How much does flood insurance cost?
A: The cost of flood insurance varies depending on the policy and the location of your home. Premiums can range from $550 to $707 or more, depending on the level of coverage and the deductible.
Q: What is covered under a flood insurance policy?
A: A flood insurance policy typically covers your home up to $250,000 and your possessions up to $100,000. However, there are exceptions, such as broken pipes and plumbing overflows, which are not covered.
Q: Can I buy flood insurance at any time?
A: No, there is a 30-day waiting period from the day you sign up and pay for flood insurance. You cannot rush out and buy insurance if a bad storm is coming.
