According to FEMA (Federal Emergency Management Agency), flood is the most common natural disaster in the country. In fact, 90 percent of all natural disasters in the U.S. involve some type of flooding. However, approximately 91% of owner-occupied homes have homeowners insurance but only about 15% of Americans have flood insurance. So, clearly, the awareness level about the need for flood insurance is very low. With severe weather patterns increasingly impacting homeowners across the country, the situation can get alarming.
We, at Texas P&C, have put together some of the least known facts around flood insurance that might just save you from heavy losses.
1. Homeowners insurance does not cover flood damage
Its commonly believed that if one has homeowners insurance, it provides coverage for flood as well. This is nothing but a myth. Homeowner insurance policies do not normally cover flood damage. In order to have adequate coverage, you need to buy a separate flood insurance policy.
2. Living outside high-risk flood zone? You might still need Flood insurance
If you live in a high-risk flood zone and you don't have flood insurance, it’s a no brainer - you should strongly consider it. You can find out if you live high-risk flood zone using the FEMA Flood Map Service Center. Even if you don't live in a high-risk area, there are good reasons why you should still consider it. Approximately 25% of all flood insurance claims are made by homeowners living in low-to-moderate flood risk areas. Purchasing flood insurance is the best way to get financial protection for the risk of flood damage.
3. Flood insurance is not just for homeowners
Flood insurance is not just available to homeowners, but also for renters, condos and businesses. In fact, if you have rented out a home in a high-risk area, your lender will usually require you to buy flood insurance.
4. Federal disaster assistance may not necessarily pay for flood damage
For being eligible for disaster assistance, a community must be declared a federal disaster area. Federal disaster assistance declarations are issued in less than 50 percent of flooding events. Furthermore, if you are uninsured and receive federal disaster assistance after a flood, you must purchase flood insurance to remain eligible for future disaster relief.
5. Flood insurance is quite inexpensive
You can get a FEMA flood insurance policy for as little as $108 per year if you are in a low risk flood zone, while the average premium across all states was about $600. To put it into perspective, average paid flood claim ranged from about $26,000 to almost $92,000 since 2000.
6. Flood comes in all shapes and sizes
We have seen water damage that has been done to homes were there was no apparent flood event. For example, a water main broke down the block and homes along the street were damaged by water entering their homes from the outside. And the Homeowners policy would not cover it because it was considered a “flood” by the carrier. Wouldn’t they have like a flood policy to protect their valuables?
Flood insurance is increasing becoming an important risk protection product. Contact us to assess your flood insurance needs and learn how and where can you purchase one. You can call us on 800-903-8690 or 972-293-2139 or contact us online here.