Why It Is Important To Have Flood Insurance In Today’s Times?
Floods play havoc every year in flood-prone areas of the United States causing widespread damage to the lives and property of the inhabitants who reside in these high-risk areas. Homeowners across the U.S. suffer millions of dollars in damages each year due to floods. The flooding is usually caused by rainstorms, hurricanes and other factors like melting snow and blocked storm drainage systems. Home insurance does not cover damages due to floods so you need to buy a separate flood insurance policy for your home.
Always opt for flood insurance cover when you buy home insurance
If you plan to buy a property in a flood-prone area, the bank or the mortgage company may require you to have flood insurance to cover your building apart from the usual home insurance. If you do not opt for a flood insurance policy, you are liable to pay for all the damages occurring due to floods. Flood insurance is never included as a part of the home insurance so make sure to read the policy document carefully. Flood insurance has to be purchased separately or added to the insurance policy. Hurricane Katrina is a classic example which wrecked havoc in New Orleans and when the residents filed for claims stating that hurricane had caused damage, the insurance companies turned down their request by saying that it was not the hurricane which caused damage but the flooding happened due to rising floodwaters which resulted in large scale
damages to the houses in the area.
Consider taking a flood insurance policy if you have a property in high flood-risk zone
If you have found a property in a high flood-risk zone, you must immediately apply for home insurance for flood areas. It may not be easy to get coverage in these areas and the insurance companies usually charge very high premiums for this cover which may range from $500-$700 a year in addition to your current home insurance. People residing outside high-risk flood zones must also consider taking a flood insurance policy as more than 20 percent of flood claims come from these properties. In the high-risk areas, the insurance company takes into consideration what flood defenses are in place, has the property suffered any flood damage in the past and if there is a basement or cellar in the property. There are some states in the U.S. where flood insurance is mandatory. Federal law states that regulated or insured lenders must require flood insurance on homes located in high-risk flood zones.
Purchase a flood insurance policy if you have received federal disaster assistance in the past
If you have received federal disaster assistance in the past for living in a high-risk flood zone, you must purchase a flood insurance policy or else you will not be legible to receive future disaster aid. To gauge your flood risk, it is recommended that you visit the FEMA (Federal Emergency Management Agency) website that shows a map of high-risk areas in your state. When you purchase a flood insurance policy, you will be reimbursed for the cost of new materials and construction at their current value or you will be reimbursed for the cost of materials minus depreciation. Contents like appliances and furniture are not covered unless you purchase such coverage separately.