4 Reasons You Need Flood Insurance
Floods are the number one natural disaster in the U.S., and you can be a victim even if you don't live in a flood zone. Are you prepared? Your standard homeowners insurance probably doesn't cover flood damage, so consider four reasons why you need flood insurance.
You Live in a High-Risk Area
You probably already know if you live in an area that's at risk for flooding, but if not, check out the flood risk map drawn by the National Flood Insurance Program (NFIP). It helps you determine whether your home sits in an area that frequently floods.
Your Mortgage Lender Requires Flood Insurance
Mortgage lenders that are federally regulated or insured typically require borrowers to purchase flood insurance for homes located in high-risk areas. However, your mortgage lender may also require you to purchase flood insurance if your house is located in a moderate-to-low risk area.
You Can't Afford Flood Damage Repairs
One foot of water in your home can cause $27,150 of damage per 1,000-square-foot, according to the NFIP. Average flood related claims can total $38,000. Do you have that amount saved? If not, purchase flood insurance for financial protection and peace of mind.
You Want to Cover Your Home and Belongings
The average flood insurance policy costs $650 a year, and it typically covers three basic parts of your home and property.
- Building coverage protects your home's physical structure
- Contents coverage protects your belongings valued between $8,000 and $100,000
- Replacement cost coverage replaces your home if it's a single-family residence and is insured with a policy that covers at least 80 percent of the total replacement cost.
After you decide to buy flood insurance, check available policies through the NFIP. Be sure to ask your insurance agent about available coverage, too, because private policies are often more affordable than those offered by the NFIP. Buying a flood insurance policy is a small investment that yields big rewards if a flood strikes. Talk to your agent today as you protect your investment. It's a wise decision.