Flood Insurance

If this sounds like something you can put off, think again. Here’s a stat that will turn your stomach – 90% of natural disasters in the U.S. every year involve flooding on some level. Holy blank, 90%! Homeowner policies do not cover flooding and when flood damage strikes the impact can be absolutely debilitating.

To begin, only a specific policy related to flood insurance will cover home flood losses because nearly all renter’s policies and homeowner policies do not include them. At a national level most of the flood insurance is run and administered through the federal government. FEMA will generally have providers they work with, and at an individual level one can purchase a policy directly from those providers. Flood insurance offered from the federal government is available, but only when the local government has determined that said territory is eligible.

In general, maximum flood insurance coverage is in the range of $250,000. This covers the structure of the home, and then you can tack on another $100,000 for the contents within the home. At a technical level, the insurance covers physical losses from water damage that are abnormal in their arrival and impact. Regarding a vehicle, damage is covered through the standard car insurance policy.

What do you need to know prior to purchasing? A lot of things, but don’t fret, the process is relatively easy (at least compared to learning how to snowboard or taking on your 12th grade son’s advance placement physics homework). Almost every insurance provider that has been vetted by FEMA can write a policy, the waiting period is approximately 30 days, and the policy can be “supersized” if you feel your assets require additional coverage. This last point is relatively new as many policyholders have found that the standard coverage just won’t do. Additional private insurers will then complement on top of the base policy.

To give you an idea of what a standard plan looks like, for an average size house in an average market, the annual premium is $402 with a $1,250 deductible. If you find yourself in a high-risk flood area however, that same policy could jump into the $12,000 range. FEMA suggests that prior to buying anything, investigate flood proofing your home via several innovative techniques that FEMA has access to. Second, elevating your home, no matter the location, can now be completed at a marginal price and has shown to be surprisingly effective against flooding of a low to medium level.   

This isn’t a fun subject, we know, but it’s a reality and being prepped against all your things getting wet, muddy and yucky is a MUST.