As winter ends and spring begins, ice and snow begin to melt causing water to flow into rivers and lakes. For people living in low-lying areas, this means a risk of flooding and causes big problems: floodwaters are quick to rise, often in a matter of minutes, and even a small amount of water can cause significant damage.
If you are buying a new home, your mortgage company will let you know if you need flood insurance. If you already own a home but have never purchased this type of coverage, it is important to find out if you need it.
Why is flood insurance so important?
Do you remember the floods in New Orleans? After the water breached the levees during Hurricane Katrina, floodwaters from the flash flood covered a large part of the city. Thousands and thousands of people lost everything, even their lives. Rapid waters should be taken very seriously.
Another example is the flood in Texas. In the case of the Houston floods in 2017, the heavy rains from Hurricane Harvey refused to stop. The floods caused massive destruction, more than $ 125 billion in property damage.
However, you don’t have to live in a hurricane zone to experience a flash flood. Fortunately, most risk areas have some kind of flood control system. Still, it is not always enough. Again, a clear example is the floods in New Orleans.
Since the water travels downward, not only could you lose everything at a higher level, the basement is also susceptible to flooding. Even if you have a powerful water pump, it would not be there to help.
How to determine if you need flood insurance
One of the best ways to find out if you need this type of coverage is to talk to your mortgage broker. Another good option is to consult a representative from your insurance company, as they will be able to quickly identify if your home is in a flood risk area. In either case, both of you will use an official flood map that pinpoints the exact high-risk locations.
What does flood insurance cover?
Some people make the mistake of thinking that their home insurance includes flood protection when you really need a second policy. Mortgage companies typically require homeowners to have this type of coverage if they live in a flood zone. In fact, without proof of protection, you couldn’t get a loan.
Homeowners living in the highest risk areas, or a community that participates in the National Flood Insurance Program (NFIP), can opt for this coverage. But if you don’t reside in one of these areas, you would have to purchase a specific flood insurance policy from your provider. The only exception would be if you have a federally backed mortgage, which means the insurance would be subsidized. In this case, the homeowner’s policy would include flood insurance.
The amount you would pay for a policy that covers a slow or flash flood depends on several factors, such as the state where you live and the degree of risk of the location of your property. On average, you could spend $ 700 a year on protection. Considering the devastation caused by the floods in New Orleans and Houston, this is money well spent.
Even if your home isn’t at high risk, it never hurts to talk to your insurance provider about flood insurance. Better safe than sorry.