Water is a critical part of life on Earth, but if the storms that came through Southern Maryland this week are any indication, we also know that it can be deadly and damaging. From hurricanes to flash flooding, we’re often faced with disasters caused by water.
The No. 1 disaster in the U.S. is flooding, and it rings up about $2 billion in insurance claims each year.
We’re smack in the middle of what experts call “peak flood season” – the stretch between late spring through summer. “This is due to a combination of factors, including a slower jet stream and more humid air,” says the Weather Channel’s Jonathan Erdman.
Those who live in flood-prone areas and lack flood insurance can be on the hook for tens or hundreds of thousands of dollars in damages. The National Flood Insurance Program says that the average claim is $46,000 and that only 15 percent of American homeowners carry the policy.
Unless you have a lot of cash stashed away, why wouldn’t you carry flood insurance? Let’s take a look at some of the reasons the experts hear.
I can’t afford it. I’ll buy it when the time comes.
This is a bit like saying that you can’t afford auto insurance, and you’ll wait until you’re involved in an accident to buy it.
Listen, it just doesn’t work that way.
Besides, the Federal Emergency Management Agency (FEMA) says that there is a waiting period (typically 30 days) after payment of the first premium before the policy kicks in. There are exceptions to this, and you can find out more at FEMA.gov.
Affordability shouldn’t be an issue – at least not when you compare the monthly cost of a policy (about $54 on average) to the tens or hundreds of thousands of dollars you’ll spend to repair or rebuild your Southern Maryland home.
I’m pretty sure my homeowners insurance covers flood damage.
Nope.
According to the Insurance Information Institute, “Standard homeowners and renter’s insurance does not cover flood damage.” If you purchased a separate policy, then you’re covered. But, as mentioned earlier, most homeowners don’t purchase it.
But I don’t live in a flood plain!
One-fifth of insurance claims for flood damage are from homeowners who live in low-to-moderate risk areas, FEMA says. Lenders typically don’t demand flood coverage to folks buying homes in these risk corridors, so it’s up to the homebuyer to be proactive.
Some tips if you have flood insurance
Review your flood insurance at least once a year, just as you should be doing with your homeowners policy.
The National Flood Insurance Program offers up to $250,000 in coverage for your home and $100,000 in coverage for your personal property.
Often, people will buy expensive items and neglect to obtain additional coverage to protect their loss. Be proactive – it may save you from the devastation of losing your home. The FEMA website offers more information.
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