Do I Need to Buy Flood Insurance in 2020. Can you name the most common natural disaster in the US? If you guessed floods, you’re correct. You might associate floods with hurricanes or springtime thaws, but the truth is that floods can happen anytime, anywhere.
Since 1970, the National Flood Insurance Progam has responded to 2.4 million damage claims in all 50 states. If you’re asking the question, “Do I need to buy flood insurance?”, the answer is probably yes.
To help you better evaluate your needs, here are five important questions to ask.
1. Is It Included With Your Homeowners Insurance?
Many people mistakenly assume that flood insurance is included with their homeowner’s insurance. Although there are a few exceptions, the vast majority of homeowners’ insurance policies do not cover flood damage.
The same is true of renter’s insurance, so be sure to read your policy carefully. Chances are you’ll need to purchase a separate flood insurance plan.
2. Do You Live in a High-Risk Flood Area?
Unless your home is on an actual mountaintop, everyone lives in a flood zone. The question is: Are you low-risk, high-risk, or somewhere in between?
If you’re unsure, you can use FEMA’s free tool to find out. Just enter your address or GPS coordinates and you can view a flood map for your area.
Why is this so important? If your house lies in a high-risk area for flooding and you have a mortgage, you are legally required to carry flood insurance.
Does that mean you don’t have to worry if you’re in a moderate-to-low-risk area? Not necessarily. Your mortgage broker might still require that you carry flood insurance, so check your policy details.
3. How Much Flood Insurance Do I Need?
Like other types of insurance, it’s up to you to decide how much coverage you want for an emergency and how much you’re willing to pay out of pocket.
If you’re feeling overwhelmed with options, there are companies that will shop for you and find the best flood insurance for your needs.
Here’s something else you should know: There’s a waiting period of 30 days before your coverage begins. You don’t want to wait until there’s a big storm headed your way before you start shopping!
4. What Does Flood Insurance Cover?
There are two main categories that flood insurance covers: building property and personal property.
Building property coverage will pay for the cost to repair, rebuild, or replace your home. The maximum amount of coverage is usually $250,000.
Personal property coverage reimburses you for the contents of your home that are damaged or destroyed by the flood. It replaces up to $100,000 worth of personal items, including their depreciation value.
5. How Much Does Flood Insurance Cost?
The exact answer depends on how close you are to the nearest body of water and how much coverage you want.
Given the increasing number of floods and related disasters, premiums have inched up in recent years. As of April 2020, the nationwide average cost for flood insurance is $972 per year.
Do I Need to Buy Flood Insurance? Now You Know
Floods and other disasters are becoming more common, even in areas where it used to be unusual.
Have you been asking yourself, “Do I need to buy flood insurance?” It’s always better to be safe than sorry, so the answer is yes!
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