Do I Need Flood Insurance? 5 Reasons

What is flood insurance?

Flood insurance reimburses you for any water damage that has been caused by flooding. If your home or belongings have been damaged, the policy will cover you financially so you can make the costs of cleanups, repairs, or replacements of your belongings following a flood.

The typical homeowners insurance policy does not cover flood damages. That is why the main reason for securing flood insurance coverage is if you live somewhere that is at risk for flooding.

How much financial help can you get after a flood?

The exact numbers may depend on the policy you are covered under. If a flood occurs and a federal disaster has been officially declared for the catastrophic flooding event in your area, the government may provide a disaster grant. This is on average $5,000 per household, which is usually not enough.

The average flood insurance claim payout per year is often more than $40,000 for flood damages that have been incurred. As you can see, the grant of $5,000, if you do not have insurance protection, is usually not enough for a family to recover from a flooding disaster.

What counts as flood damage?

Flood damage encompasses a wide range of destructive events, often extending beyond the immediate aftermath of natural disasters. While hurricanes, storm surges, heavy rains, and high tides are primary culprits, the definition also includes damage caused by other sources, such as overflowing rivers, dam failures, or even rapid snowmelt.

In fact, any area, even those with moderate flood risk or not officially designated as a risk flood zone, can experience flooding due to these unpredictable factors.

The Financial Impact of Flood Damage

The devastating impact of flooding is not limited to high-risk flood areas. Even a seemingly minor flood event, with just an inch of water, can inflict significant damage, costing homeowners an average of $25,000 in repairs. This financial burden can be overwhelming, especially for those without adequate insurance coverage, leading to potentially devastating flood claims.

The Importance of a Separate Flood Insurance Policy

Considering the widespread and costly nature of flood damage, obtaining a separate flood insurance policy is a prudent decision for many homeowners, regardless of their perceived risk level.

While a standard homeowners insurance policy does not cover flood damage, a separate flood insurance policy, such as an NFIP flood insurance policy, can provide the financial protection needed to rebuild and recover after a flood.

Consulting a Flood Insurance Agent

Navigating the complexities of flood insurance can be challenging. A knowledgeable flood insurance agent can help you understand the different types of flood insurance policies available, assess your risk level, and tailor a policy to meet your specific needs.

Whether you opt for a standard flood policy or explore options like the National Flood InsuranceProgram (NFIP), having the right coverage can make all the difference in the aftermath of a flood event.

Homeowners insurance vs flood insurance

While both homeowners insurance and flood insurance offer protection against water damage, their coverage differs significantly.

Homeowners Insurance Policies and Water Damage

Standard homeowners insurance policies typically cover water damage caused by internal issues within your home, such as burst pipes, leaking appliances, or overflowing sinks. However, this coverage does not extend to water damage resulting from natural flooding events.

Natural Flood Events and Flood Insurance

Natural flood events, such as flash floods, heavy rainfall, storm surges, or overflowing rivers, are excluded from standard homeowners insurance. To protect your property from the financial devastation of these events, you need separate flood insurance.

Why Flood Insurance is Essential in Flood Zones

Living in a flood zone, whether high-risk, moderate-risk, or even low-risk, means your property is susceptible to flood risk. Even areas not designated as official flood zones can experience flooding due to unpredictable weather patterns.Therefore, having flood insurance is a crucial safeguard for many homeowners.

Flood Insurance and Florida Property Owners

Florida, with its extensive coastline and vulnerability to hurricanes and tropical storms, is particularly prone to flood events. As a result, many, if not most, Florida property owners are strongly advised to consider obtaining flood insurance as an added layer of protection for their homes.

Making an Informed Decision

If you own a property in an area with any degree of flood risk, it is essential to evaluate your insurance options carefully.Understanding the distinctions between homeowners insurance and flood insurance will empower you to make informed decisions and ensure comprehensive protection for your home against the various water-related risks it may face.

What if I’m renting?

A renters insurance policy may cause more hesitation, especially when it comes to whether you need flood insurance or not. The problem is, a renters insurance policy may not cover any flood damages.

Typically, your landlord will have some sort of insurance policy in place for the entire building or living area. In these cases, you may still wish to get adequate protection for your personal belongings. You may want to consider a contents-only flood insurance policy so that you may file an insurance claim if your possessions get damaged or ruined in a flood.

A contents-only flood insurance policy may cover articles and items such as furniture, clothes, rugs, electronic devices, and other covered items.

Is there any homeowners insurance that covers flood damages?

It may be possible for you to add endorsements to your current homeowners policy. However, this will vary from company to company, and it may be best to consult with an agent to find out if this is the best option for you.

Flood zones

Flood zones are a way of classifying areas that are prone to flooding and can significantly affect your flood insurance premiums. While flooding can happen anywhere, an area designated as high risk for flooding, such as many regions in Florida, might mean that you should get flood insurance..

What is a flood zone?

According to the Federal Emergency Management Agency (FEMA), an area designated as a flood hazard region is called a Special Flood Hazard Area (SFHA). There are several levels of flood risk hazards.

An insurance company might give you a quote based on where you live, your home’s flood risk, location, size, as well as many other influencing factors.

Mortgage lenders and flood coverage requirements

In some cases, even if it isn’t required by law, you might need flood insurance because of other requirements. For example, your mortgage lender might force you to get a flood insurance policy if you have a federally backed mortgage. If your house is in a FEMA-designated flood hazard area, the necessity of flood insurance becomes even more critical.  

Private vs public flood insurance

The National Flood Insurance Program (NFIP) is the government’s official federal flood insurance policy. Many insurance carriers will offer you flood insurance options through the federal NFIP, but some companies will also offer private flood insurance.

In Florida, the insurance industry for flooding has evolved greatly in the last five years. A policy you may read a review about from a decade ago might not offer the same type of protection or be available now. It is always important to check the most up-to-date information on insurance so that you can get the most affordable rates with the best coverage for your home.

How much does flood insurance cost?

According to the NFIP’s publicized statistics, the average cost of flood insurance is around $738 per year. The average flood insurance cost in Florida is around $562 per year, through NFIP, due to differences in state flood insurance expectations.

If you’d like lower rates and greater flexibility and control in terms of flood insurance coverage, a private flood insurance carrier may be preferable to you.

Amount of coverage

The amount of coverage that your insurance will give depends on the exact policy you choose. Private and federal insurance policies may also differ in the amount of coverage offered. Be aware that flood damages can often cost you and your family tens of thousands of dollars in repair fees and more.

Deductibles

Different policies will typically have differing insurance deductibles. It can be a difficult process to balance a reasonable deductible with a low rate. Worth Insurance’s team is here to help you get a free quote and quickly find you the insurance coverage that may be best suited for you.

How to choose the best flood insurance

You can get help choosing the right flood insurance with Worth Insurance. Our team can find you the best rates from the top carriers in a timely and professional manner.

Our experts at Worth nsurance will be able to match you to quality insurance options that can help you fill the gaps in coverage for you and your family.

If you need other kinds of specific coverage, such as homeowners insurance, auto insurance, or more, Worth Insurance also has your back. We’re the go-to agents for when you want insurance, fast, simple, and easy.