Five Things You Didn’t Know About Flood Insurance

Reblogger
Real Estate Agent with Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC SP98364271

Many first time Bowie MD home buyers including homeowners have Flood Insurance. And some Bowie MD Homeowners don't have Flood Insurance. Did you know that Flood Insurance isn't part of your standard home insurance? So if you have home insurance,you definitely want to check with your local insurance agent. And if you don't have one please get one. It will save you a lot of money as well as heartache and pain if you get one.

 

Please read this article to find out more about the Five Things you didn't know about Flood Insurance.

Original content by HomeInsurance.com LLC

Flooding is the most prevalent and expensive type of natural disaster in the country. According to the Insurance Information Institute, $50 billion worth of losses are attributed to flood damage each year.

In certain parts of the country, floods can occur any time. For example, if you own a home near an ocean, river, lake, pond, creek, or simply on low land, you may get a twinge of panic each time a storm looms over your town or city. For homeowners in these locations, flood insurance likely is required by lenders.

For other homeowners, the thought of flood insurance probably never crosses their minds. But maybe it should. According to the National Flood Insurance Program, every state saw instances of floods or flash floods within the past five years. And nearly 20% of flood insurance claims come from homeowners who live in moderate-to-low risk areas.

No matter which category of homeowner you fall under, here are five things you may not know about flood insurance policies:

Flood insurance isn’t part of standard home insurance

Typically, home insurance policies don’t include coverage for flood damage. To receive protection from flooding, you’ll typically need a separate insurance policy that focuses on this singular type of natural disaster. Flood insurance is sold through the NFIP as well as several private insurers.

However, there are exceptions to every rule. If a pipe bursts in your home and causes water damage, you likely will receive coverage from your home insurance policy. Speak with your local agent for clarification on multiple scenarios and find out whether a flood insurance policy is the right choice for you.

Flood insurance doesn't go into effect for 30 days

When you purchase a flood insurance policy, there’s a 30-day wait period before it goes into effect. So if you live on one of the coasts and purchase a policy a week before a hurricane is scheduled to roll through town and your home suffers flood damage from that hurricane, you’ll likely have to pay for repairs on your own.

Flood insurance can be affordable

The average yearly cost for flood insurance is $700, according to the NFIP, though it can vary greatly depending on whether you live in a high risk zone; your home has a basement; if you choose contents only or building and contents coverage; the size of your home; and the amount of coverage you choose.

How much can a little water hurt? The average amount of damage caused by just two inches of standing flood water in a 1,000-square-foot home is $10,670, according to the NFIP. That house a little small for you? The same amount of standing water in a 2,000-square-foot home would cause about $21,000 in damage. Many homeowners, when they weigh the costs of flood insurance against the amount they’d have to pay out of pocket to repair damage from a flood, decide purchasing a flood insurance policy is a no-brainer.

Flood policies may not cover everything

Policies generally only cover damage directly caused by flooding, so if your home is uninhabitable due to mold or mildew damage that could’ve been avoided, you may be out of luck.

Flood insurance policies typically cover the contents of your home such as furniture that gets damaged by water, but property outside the home may be a different story. If patios, decks, or the furniture that sits atop them get damaged due to a flood, the cost to repair or replace the items may fall solely on you.

Plus, if you live in a high risk area, damage caused by windstorms could be excluded from your home insurance policy. While you’re discussing a separate flood insurance policy with your agent, ask if you may need a windstorm rider as well. 

100-year flood zones

The government maps out 100-year and 500-year flood zones and the price you pay for your policy will vary depending on which one you live in. If your area is a 100-year flood zone, that means it’s been determined that there’s a 1% yearly chance of flooding. That doesn't sound like much, right? But over the life of a 30-year mortgage, that translates to a 1 in 4 chance of a flood.

This system can get confusing, so give your agent a call for clarification.

Shannon Ireland writes for SafecoInsurance.com and HomeInsurance.com, an online resource for homeowners and drivers across the country. Offering comparative automobile and home insurance quotes, consumers rely on HomeInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeInsurance.com blog provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases. 

Comments (3)

Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Lanre,  what a lot of people don't understand is that you can have "flood" damage without living near a flood zone.  If you get a bunch of water in your basement after a storm, you're probably not covered, and this can happen after any heavy rain that comes on top of heavily saturated soil. 

Nov 09, 2015 07:06 AM
Lanre-"THE REAL ESTATE FARMER" Folayan

Absolutely. That's why homeowners need to call their insurance agent to be 100% sure what kind of insurance they have instead of assuming. Thanks for your comment Patricia Kennedy. :-)

Nov 09, 2015 08:27 AM
J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES

There is a secondary market for flood insurance... several carriers are doing it by going direct to Lloyds. It is about half the cost of FEMA's product and about 95% of the lenders will accept it. I recently had a house, with a $5,000 deductable the annua premium was $2450. Going this other way it got down to $950

Makes a difference

Nov 13, 2015 03:19 AM
Akil Walker
Bennett Realty Solutions - Bowie, MD

Hi Lanre

 

helpful information that definitely needs to be shared with homeowners. 

Jan 07, 2016 09:06 PM