Common Misconceptions About Flood Insurance
Flood insurance is a specific type of coverage that protects homeowners against damages caused by flooding. Unfortunately, there are several misconceptions associated with flood insurance that can leave individuals and their properties vulnerable. Here are some common misconceptions: Homeowners Insurance Covers Flood Damage: This is perhaps the most widespread misconception. Most standard homeowners insurance policies do not cover damage resulting from floods. You typically need a separate policy for flood coverage.
Only Those Living in High-Risk Flood Zones Need Flood Insurance: While properties in high-risk zones may be required by lenders to have flood insurance, flooding can happen anywhere. Many floods occur in areas that are not designated as high-risk flood zones. Federal Disaster Assistance Will Cover All Flood Damage: Federal disaster assistance is typically in the form of low-interest loans that you will need to repay, not grants. Furthermore, this assistance is only available if the President declares a disaster, which doesn’t happen for every flood. All Flood Insurance is the Same:
There are different types of flood insurance policies based on where you live (e.g., in a high-risk vs. moderate-to-low-risk area) and the type of structure being insured. Flood Insurance Covers All Types of Water Damage:
Flood insurance typically covers damage from rising water, such as storm surges and overflowing rivers. It may not cover damage from sewer backups or leaks from above unless they are directly related to a flood event. Flood Insurance is Too Expensive: The cost of flood insurance can vary based on your home’s risk level, location, and the deductible you choose.
For properties in moderate-to-low-risk areas, premiums can be relatively affordable. You Can’t Buy Flood Insurance if You’ve Been Flooded Before: Even if your property has been flooded in the past, you are generally still eligible to purchase flood insurance. A Few Inches of Water Damage Isn’t Costly:
Even a small amount of water can cause significant damage to flooring, walls, furniture, and electronics. Repair costs can quickly add up. I Can Wait Until a Storm is Forecasted to Buy Insurance: There is typically a 30-day waiting period from when you purchase flood insurance until the policy goes into effect. This means that if you buy a policy because a storm is coming,
you’ll likely not be covered in time. The NFIP (National Flood Insurance Program) is the Only Source for Flood Insurance: While the NFIP is the main provider in the U.S., there are private insurers that offer flood coverage as well. It’s essential to understand what your policy does and doesn’t cover and to
discuss any questions or concerns with an insurance professional. Being knowledgeable and proactive can help homeowners better protect their property and financial well-being.
All Property Inside My Home is Covered: While flood insurance typically covers the structure of the home and many of its essential components, there may be limits on coverage for items in your basement or particular personal property. Always check the specifics of your policy. Only Homeowners Can Purchase Flood Insurance: Renters can also buy flood insurance to protect their personal belongings. If you’re renting a property in a flood-prone area, it’s
wise to consider this coverage. All Types of Flood-Related Expenses are Covered: Besides damage to your home and possessions, flooding can incur other expenses, like the cost of living elsewhere while your home is repaired. Some of these costs may not be covered by standard flood insurance.
Flood Maps Never Change: Flood risk can change over time due to environmental factors, new developments, or other reasons. As a result, flood maps may be updated. Property owners should be aware of any changes in their flood risk designation. Older Homes Will Face Higher Premiums: The age of a home isn’t the only factor in determining flood insurance premiums. The home’s elevation, its foundation type, and its flood zone designation are more impactful.
Having a Flood Elevation Certificate is Unnecessary: An Elevation Certificate provides information about your property’s elevation compared to the base flood elevation in your area. Having one can help determine your flood risk and can sometimes result in reduced premiums if your property is at or above the recommended level. Flood Insurance is Only for Coastal Properties:
Flooding isn’t restricted to coastal areas. Inland areas can flood due to heavy rainfall, snowmelt, or dam failures. It’s essential to evaluate the flood risk for any property, regardless of its proximity to the coast. Properties in Flood Zones are the Only Ones at Risk: Over 20% of flood insurance claims come from properties outside of high-risk flood zones. Even if you’re not in a designated flood zone,
your property can still be at risk. Private Flood Insurance is Inferior to NFIP Coverage: Private flood insurance can sometimes offer higher coverage limits, more coverage options, and sometimes even lower premiums than NFIP policies. It’s worth comparing both options.
Once You Have Flood Insurance, You’re Set for Life: As with any insurance policy, it’s essential to review and update your flood insurance regularly. Your coverage needs may change, premiums may fluctuate, and new options might become available. Awareness and education about flood insurance can lead to better decision-making and more comprehensive coverage. It’s always a good idea to consult with an insurance professional to ensure you have the appropriate protection for your property and belongings.