What do you mean I am not covered for flood damage? Sadly, that’s what millions of homeowners say each year with shock and sometimes horror.
Of course, they never thought this could happen to them, after all they don’t live in a flood zone. But they nonetheless experienced a record-breaking rainstorm, sewage back-up or failed flood control in the county. The good news was that one was injured, the bad news was that they didn’t buy the right flood insurance policy or worse – they didn’t have any policy at all.
To help you avoid this fate, here are the top 10 mistakes most people make when buying flood insurance.
1. Assuming you need to live near a large body of water, flood area, or low lying areas to qualify for flood insurance.
Most floods are caused by several different causes besides living near a large body of water. For example, rain, snow or ice storms, hurricanes and backflow of water or sewage, in addition to a dam or other failure of flood control and more.
2. Assuming your standard home insurance policy covers flood damage..
This is one of the main reasons why it is so important to stay informed and up to date on insurance matters. Why? Because most people assume they are covered for flood or water damage in their standard insurance policy. Surprise! You are not.
The point is, most standard policies don’t cover flooding or most water damage. For this you will need a separate policy or rider.
3. Assuming you can’t purchase flood insurance if you’ve been turned down by traditional insurance companies.
You can purchase flood insurance as long as your community participates in the National Flood Insurance Program.
4. Assuming all flood insurance is too expensive.
The average flood insurance policy costs as little as $ 353 per year for coverage.
5. Assumes Federal Disaster Assistance will pay for flood damage.
Federal disaster assistance does not pay for damage caused by flooding. At best, it can help provide low-interest loans if you qualify – and only if the president declares the area you live in as a disaster.
6. Assuming you don’t need flood insurance if you live in a low to moderate risk area.
Almost 25% of all flood insurance claims originate from areas with low to moderate flood risk.
7. Assuming you need to purchase a comprehensive flood insurance policy.
You may be eligible for the Preferred Risk Policy (a lower cost flood insurance policy) which offers content coverage starting at $ 39 per year.
8. Not sure what is covered by the replacement cost and what is covered by the actual cash value?
Knowing this is important in making the best, informed decision about what type of policy to purchase and from whom to buy it.
9. Assuming you are covered for flood damage if you are renting.
Your homeowner’s policy only insures the building and not your personal property. However, you can take out an insurance policy for your personal property.
10. Take the first policy you come across.
The best way to buy the most coverage for the best price is to compare at least three different companies. You might be surprised at the difference in price and / or service. By taking the time to follow and remember these 10 guidelines, you will avoid the mistakes many people make when purchasing flood insurance.