Flood insurance used to be a type of coverage that most people in low-risk areas thought was simply “nice to have.” However, the chances of flooding are much greater than they once were, making it something that every homeowner should consider.
According to a senior scientist at the U.S. National Center for Atmospheric Research, climate change intensifies naturally occurring storms. They’re also bigger and last longer, and include heavier rainfall.
A study conducted by the University of California revealed that 16 major floods occurred in 2016 and at least five were once-in-1,000 year precipitation events. Flooding last year surpassed all others in recorded history.
I Don’t Live In A Flood Zone So I Don’t Need Flood Insurance, Right?
Wrong. Many people don’t buy flood insurance, because they do not believe they are at risk. According to a CNBC article, about 80% of Hurricane Harvey victims did not have flood insurance, because their homes weren’t in a designated “high hazard flood zone.” Unfortunately, 25% of all flood claims originate from homes outside of those high risk flood zones.
Homeowners may also mistakenly believe the only concern is coastal tidal flooding. However, statistics from the USGS do not bear this out. Most flooding occurs due to heavy rainfall.
Houston’s historic flood recorded 16 inches of rain in less than 12 hours. According to National Weather Service data, that’s the most they’ve had in one year since the 1960. CoreLogic’s Natural Hazard Risk Summary estimates about half of all residential and commercial properties in the Houston-Sugarland-Baytown area were not in a designated flood zone requiring insurance.
Doesn’t Homeowner’s Insurance Cover Flooding?
No homeowners insurance policy protects you from flood damage, whether the water enters your home from a storm, the over-saturated ground, or an overflowing or surging river, pond, or ocean. It does pay for wind-related events such as broken windows or a damaged roof.
You need to buy insurance through the National Flood Insurance Program and/or private insurance to protect your home and possessions. You do not need to live on a high hazard flood plain to buy flood insurance, either.
NFIP coverage tops out at $250,000 for your dwelling and $100,000 for personal possessions. There’s normally a 30-day waiting period before a flood policy takes effect. It does not cover extra living costs if you must stay in a hotel and eat in restaurants.
If you already have NFIP coverage for up to the $250,000 maximum limit, you can buy “excess flood insurance” privately to protect you above these limits. Some policies also provide housing coverage if you’re displaced from your home.
Why Risk It?
Some homeowners avoid flood insurance, because they think it is too expensive. However, without flood insurance you risk a great deal. According to FEMA data, 59,332 people filed flood claims in 2016 and FNIP paid $3,693,244 in damages. That’s an average of almost $63K per claim, not including private insurance claims.
Discuss your needs with your independent insurance agent. They work for you and understand the ins and outs of flood insurance. Don’t leave your home and possessions vulnerable. Flood insurance is a necessity today, not an option.