Flood Damage and Home Insurance

Floods damage or destroy more homes in the United States than any other type of natural disaster. In the course of your home’s 30-year mortgage, your home has a 26% chance of suffering damage from a flood, compared to a 9% chance of fire.

Naively, many people believe they do not live in a flood zone, when in fact everyone lives in a flood zone. Flood zones are geographic areas defined by the Federal Emergency Management Agency (FEMA) that are at risk of flooding, ranging from low-risk to high-risk areas. Surprisingly, 25% of all flood insurance claims occur in low- to moderate-risk flood areas.

Home Insurance and Flood Protection

Most standard home insurance policies do not cover flooding; so it is up to you, as a responsible homeowner, to seek a flood insurance policy. There are 3 types of flood insurance policies:

• Dwelling - covers homes
  
• General Property - covers apartments and businesses
• Residential Condominium Building Association Policy - covers condominiums.

After purchasing a flood insurance policy, homeowners should be aware that the policy does not take effect until 30 days after the policy is purchased.

The Benefits of Flood Insurance Policy

As little as 2 inches of water can cause an incredible amount of damage to one’s home. Flood insurance is relatively inexpensive, especially considering how much protection you get from a flood insurance policy. Flood insurance typically covers a wide variety of flooding events—not just those caused by excessive rain. Flood insurance will typically cover your home and belongings in the event of:

• Swimming pool leaks
• Clogged storm drains
• Bursted pipes.

Despite the benefits of flood insurance, only 14% have purchased a flood insurance policy on their homes.