Who Should Purchase and Maintain Flood Insurance?

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Unsurprisingly, flood insurance protects residential and commercial properties from the peril of flooding. Certain parts of the country experience heavy rainfall at various points in the year, which can make floods more common. Even areas with sparse rainfall might invite flood conditions with a minor storm, though. Homeowners outside of the south and southeast shouldn’t assume they’re impervious to experiencing flood damage. These days, too many homeowners discover the horrors of not having flood insurance on their homes.

Flood Damage Excluded From Homeowners Insurance

That’s because all standard homeowners insurance policies exclude coverage for flood damage. Homeowners policies protect against things like water backup damage and burst pipes. In some cases, policies cover water damage if a storm penetrates the roof and causes damages. Water that otherwise finds its way into a home and wreaks havoc is excluded from coverage. Sadly, many homeowners don’t realize this fact and find themselves on the hook for thousands upon thousands of dollars in damages.

A Flood Doesn’t Require A Massive or Prolonged Storm

Plus, most people don’t realize how little water is required to flood a home and result in damages. Flooding can occur in any area that receives rain throughout the year. A minor storm, under the right circumstances, could cause flooding inside a home or condominium. This situation is especially common in areas in valleys or at the bottom of hills. In these situations, minor stormwater pools in one place and enters the premises. Homeowners need to realize how minor storms produce massive flood damages on individual properties.

Who Should Purchase Flood Insurance?

You might be wondering – does everyone need to purchase flood insurance? Generally speaking, the answer is a simple no. The chance of a flood in certain areas is minor, and the cost is tangible that homeowners must consider. It doesn’t always make sense to pay for flood insurance when the risk of a flood is minute. Still, flood insurance makes sense for any area that’s in a designated flood zone or prone to occasional flooding. Homes in areas where water tends to pool during a storm might want to consider coverage as well.

Speaking of flood zones, most lenders require home buyers to purchase flood insurance in these areas. Such homeowners won’t have a choice on the matter. That shouldn’t prevent other homeowners without this requirement from considering flood insurance. If the pricing makes sense, then the coverage can provide protection and peace of mind for years to come. Premiums are higher in flood-prone areas versus areas that rarely experience flooding. For some people, the cost of flood coverage is small enough to purchase for peace of mind alone.

The Verdict On Flood Insurance

For most people, flood insurance isn’t required by their lender. Most of those people forgo this coverage, but some of them pay dearly for the decision once a flood occurs. The decision for coverage comes down to risk management and risk tolerance. Plenty of homeowners know their area and know when flood insurance warrants consideration. Otherwise, an individual might be willing to take the risk on flood damage, and another might prefer the peace of mind afforded by said coverage.

Flood insurance is provided by both the National Flood Insurance Program administered by FEMA and private flood insurers. The NFIP comes with limits on coverage for the dwelling and personal property. Since it’s a federal insurance program, it’s well-regulated and solid financially. Private flood insurance is more flexible and definitely deserves consideration for homeowners. Either way, every homeowner should take the time to assess their property’s flood risk, both in their own opinion and by checking out maps for nationwide flood zones.

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