Flood insurance is one of those policies that most people never buy because they assume they’ll simply never need it. After all, what are the actual chances an act of God is going to destroy your home? As it turns out, it doesn’t take a natural disaster for your flood insurance to kick in and it could save you from bankruptcy down the road. Let’s take a closer look at the five most common flood insurance myths.
Flood Insurance Is Only For People Who Live On A Floodplain
If only floods played by those rules. While living on a known floodplain does make you considerably more likely to experience a flood, floods do not occur exclusively on floodplains. If you live on a floodplain it’s likely that your mortgage company requires you to have flood insurance. However, you should still consider purchasing flood insurance even if you don’t live on a floodplain. Floods can easily be caused by a bursting pipe or washing machine malfunction and can be just as damaging as those caused by nature. Luckily, flood insurance can protect you from that! A broken pipe is already a bad day, don’t make it worse by neglecting to protect your financial future.
I Have A Homeowners Policy That Covers Floods
This is a very common misconception among homeowners, unfortunately, it’s not entirely accurate. While some homeowner policies do cover floods, most standard ones do not. In fact, the average homeowner policy tends to avoid coverage for both floods and earthquakes. Take the time to read your homeowners policy carefully before assuming you have coverage! You don’t want to find out at the last minute that you are not covered. It’s important to remember that most flood insurance policies take 30 days from the time you purchase them to kick in. It pays to plan ahead.
Water Damage Is Water Damage
While common sense may tell you that this is true, when it comes to insurance it’s blatantly false! In the eyes of the insurance industry there are actually several different kinds of water damage, some of which may not be covered under your current policy. For instance, there is a difference between water damage caused by a storm, and water damage caused by a flood. Insurance companies also view water that’s caused by a broken pipe, or water backup as another type of water damage. If you are unsure what you already have covered, or what you need covered, take the time to chat with an insurance professional!
Federal Disaster Assistance Will Cover Me
While it’s impossible to call this patently untrue, it’s certainly a gamble. While yes, under certain conditions, the federal government will help compensate for flood damage they certainly do not do so all the time. In fact, for this to even be an option your home has to be in a space that has been officially declared a federal disaster area. Not only that, but if you are uninsured and want to receive federal disaster funds for flood damage, you will have to then purchase a flood insurance policy to even remain eligible for disaster relief.
It’s Just Too Expensive
Flood insurance policies are likely much less costly than you think. While the total cost varies by policy, it is possible to get some flood insurance for as low as $112 per year! Take the time to do your research and consult with an insurance professional. It’s better to budget for flood insurance now, than go bankrupt because you didn’t later.