Who needs flood insurance? There isn’t one simple answer, but one thing is clear: many people who don’t have flood insurance end up wishing that they did. According to the Federal Emergency Management Agency (FEMA), about one fourth of flood claims come from areas classified as low to moderate in flood risk. Yet, according to the Insurance Information Institute, only 12 percent of homeowners had a flood insurance policy as of 2016.
Here are some key points to consider about flood risk:
- When it comes to flood potential, terms like “minimal risk” or “low risk” do not mean “no risk.” No property has a flood risk of zero.
- Your mortgage lender may not have required you to purchase flood insurance. However, that should not give you a false sense of security that you are not at risk of flood damage. Flood insurance is required by law only for federally insured mortgages issued in high-risk areas. However, floods can and do occur in zones classified by FEMA as minimal, low, and moderate risk.
- Standard homeowner’s insurance policies do not cover flood damage. Without flood insurance, you would bear the full cost of repairs if a flood damages your home.
- Even in high elevation areas that are not near a body of water, a variety of events can cause floods, ranging from heavy rainstorms to a rapid melt after a heavy snow.
- Renters need flood protection too, since standard renters insurance policies do not cover flood damage.
The good news is that the peace of mind you can enjoy by adding flood insurance can be very affordable, especially if you are in an area that is not at high risk. While federal coverage from FEMA’s National Flood Insurance Program (NFIP) is the primary provider for both homeowners and renters, various private options are also available. Private flood insurance may cover higher damage levels or provide options in communities that do not participate in the NFIP.
Your Collens-Wagner insurance specialist can help you find the right coverage, at the right cost, to protect you from the risk of flood damage.