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 According to FEMA, everyone lives in a flood zone. You don’t have to be near water to have a flood in your home. In fact, you don’t even have to live in a flood zone to get severe water damage from a flood. Since floods are the world’s most expensive and prolific natural disaster, they are everywhere and no one is excluded from flood damage. While there are a few exceptions to the rule, flood insurance is definitely a must have for any homeowner.
Flood Damage
It’s a common misconception that flood damage only occurs near water. In fact, floods can be caused by many different factors. Snow run off can pose a major risk during winter and spring. Storm water channels can become blocked with debris and cause flooding. Even a simple session of summer storms can cause an overloaded drainage system to malfunction and wreak havoc on your home.
NFIP
Since homeowners insurance doesn’t cover floods, it’s a good idea to get a flood insurance policy from the National Flood Insurance Program (NFIP). Flood insurance can cover your home, possessions and business. The NFIP provides flood victims with a $250,000 policy for any structural damage and up to $100,000 for any belongings. It doesn’t matter if your home is in a low risk area for flood damage, you can still get NFIP insurance as long as your community participates in the program. And just because your home is in a low risk area doesn’t mean it couldn’t happen to you—almost 25 percent of all flood insurance claims come from low risk flood zones.
Coverage
NFIP covers a lot and gets you back on your feet after the disaster—even your business. Up to $1,000,000 is available for non-residential structures and contents. Renters and homeowners alike can get up to a $100,000 policy—and that’s just on contents alone. What’s really great about the NFIP is that it allows homeowners, renters and business owners to get an affordable flood insurance policy that covers the majority of costs associated with a flood. A typical flood insurance policy for a single family home in a floodplain zone costs a little more than $500 a year for about $65,000 worth of coverage for the building and its contents. However, a $50,000 disaster home loan can cost you more than $250 a month at 4 percent interest over the next 20 years.
Low Risk Areas
NFIP also provides homeowners with a low cost preferred risk policy for consumers in areas that are in low to moderate risk flood zones. Homeowners pay as little as $180 a year to cover the building and possessions. Business owners get a great rate at $500 a year. Even renters can get insurance coverage for as little as $39 a year.
Waiting for a Flood
The worst thing you can do is wait for a flood to happen. Many homeowners think that FEMA will provide federal disaster relief in case of a flood. FEMA will only provide coverage for some of your possessions lost in the flood. The fact of the matter is that less than 90 percent of all floods in the United States are declared a federal disaster emergency..
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