The 6 Common Misconceptions About Flood Insurance

flood-insurance

The world’s weather has changed drastically, and frequently we get to see floods in different corners of the world, including deserts and places where previously it was hard to imagine a flood. Nowadays, it is not necessary that you have to live in a high-risk flood zone to face the risk of being affected by floods. Floods can happen anywhere. Regular insurance policies for homeowners do not cover damages done by flood water. Services like Alder provide you with a great tool to calculate how long it will take your home to flood. Flood insurance policies are issued by the National Flood Insurance Program run by the federal government and these policies top out at $350,000.

Here are the six common misconceptions about flood insurance that will be cleared in this article.

  1. Your home must be in a flood plain

Most people believe that to purchase flood insurance you have to live in a flood plain. However, this is not so. Anybody who wants to buy flood insurance can do so irrespective of where they live. The Federal Flood Insurance Program uses standardized rates to calculate the value of the flood policy. They take into account the value of the house and not its location. When you buy flood coverage, there is a 30-day waiting period before it becomes valid that is why it is important to buy it beforehand.

  1. Only people living in high-risk areas should buy flood insurance

Recent statistics indicate that one of every four flood claims is made by a person whose home is not in a flood plain. Nowadays, it is important for homeowners to be prepared for every contingency. They should take into account all options and carefully weigh all of the dangers even if they do not live in a high flood risk area.

  1. Flood insurance covers everything in your house

The highest amount of money that the federal flood policy will give you is $250,000. That is why if you are buying a house in a high flood risk area you should keep in mind that if floods damage the structure of your house and all your belongings, you will only receive up to $250,000. Regardless of what valuables you have, the flood insurance won’t cover everything once the limit is reached.

  1. The regular homeowner policy covers floods too

Many people believe that the home insurance policy also covers flood damage, but that is not the case. However, keep in mind that the standard home insurance policy available to you doesn’t cover floods and earthquakes. If you want to safeguard your property against these natural disasters, you have to have to take out separate policies for them.

  1. The water damage clause in your policy covers floods as well

Many people are under the misconception that the water damage mentioned in their typical home insurance policy covers all damages due to water. But this is not so. Damage caused due to storms fall under water damage while damage due to floods is a separate issue and requires a specified flood insurance policy.

  1. Flood plain maps do not evolve

It is possible that when you bought your house, it was not in a flood plain. But due to geographical changes is now in a flood plain. You can find out more about it from the internet or your agent and take steps accordingly.

Do keep these things in mind and understand the importance of flood insurance.

 

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