Get Flooded with Insurance Facts: 5 Myths (And Truths) About Flood Insurance

April 14, 2019

Did you know that a single inch of water can damage your home so much that you spend over $25,000 to make repairs? Pretty shocking, isn’t it?

This shows that even just a little water can cause your family a lot of financial damage if you don’t have any flood insurance.

Whether you’ve experienced flooding yourself or just heard about flood insurance, you might be curious about what is flood insurance and why you would need it.

At the same time, your research might lead you to flood insurance myths that are hard to separate from the facts. The good news is it’s easy to understand the real flood insurance facts you need to know to decide whether this insurance is right for your home.

Here are five myths (and insurance fun facts) about flood insurance you should know.

Myth: Flood Insurance Is Only Needed for Homes in Risky Areas

If you live nowhere near any body of water, you might think you’re immune to flooding. You also might think flood insurance is a waste of money if your home is not in a low-lying area that gets a lot of rain.

But the truth is that the weather can be unpredictable, meaning your home is still at risk for flooding if you get any rain at all! Actually, even just a few inches of rain can cause a lot of damage, so being in a low-risk area alone doesn’t protect you.

Extra water from a heavy rainstorm alone can actually damage your home. In that case, you will likely be out of luck unless you have money to pay for the damage, so having flood insurance coverage can give you peace of mind. 

Myth: It’s Too Late Now to Buy Flood Insurance

You might think that you can only buy flood insurance at the time you purchase your home or start renting. Luckily, this is just another one of the common flood insurance myths that many people believe.

Instead, you’ll want to check if the community you live in is part of the National Flood Insurance Program offered through FEMA. If so, you can buy your flood insurance whenever you want to, even if your home has flooded in the past or is currently flooded! However, you do need to be aware that a 30-day waiting period can apply between the time you pay your first insurance payment and the policy takes effect. 

So, this brings up one of the important flood insurance fun facts to keep in mind. You’ll want to have your flood insurance active sometime before you feel you’ll have to make a claim.

Myth: Homeowners or Renters Insurance Already Covers Flooding

Whether you rent or own, you might feel that your homeowners or renters insurance policy has you covered in case of flooding.

It’s true your policy might cover water damage in a flooded basement from a broken pipe or other accidents. But while it’s one of the most well-known flood insurance myths, most homeowners insurance policies actually exclude water damage from outside sources like floods.

Therefore, it’s a good idea to know what does flood insurance cover vs your regular homeowners or rental insurance. You can check your current homeowners or renters insurance policy documents to look for exclusions such as floods as well as contact us to learn how a flood insurance policy can help you.

Myth: You Can Always Rely on Government Help for Flooding

You might have heard that FEMA has helped people deal with flooding from natural disasters like hurricanes. It’s true that people can get grants and interest loans to deal with the aftermath.

But one of the important flood insurance facts is that FEMA’s disaster assistance only applies in severe disasters and emergencies that the president declares. So, less than half of the floods that occur do not meet this requirement – meaning traditional flood insurance is still necessary.

Even when you can get FEMA help, it still likely won’t pay for all the damage. Even when it does, you’ll likely pay most of it back someday.

Therefore, it’s important to understand the benefits of private flood insurance vs FEMA.

Relying on FEMA means you’ll only get limited funds and only if your disaster is covered. With regular flood insurance, you can get up to $250,000 to repair damages to your home and replace belongings. That extensive coverage can sure make the average $700 a year cost of flood insurance worth it!

Myth: Flood Insurance Will Take Care of All Damage

When you purchase a flood insurance policy, you might believe that you’re completely covered from all damages. This includes your home itself and all of your personal property inside it. 

But one of the true flood insurance fun facts is that there are limits to what flood insurance actually covers. Not only do policies generally have a limit of $250,000 in damages to the home structure with only $100,000 max covered for personal possessions. On top of that, any relocation costs usually are not covered. 

So, if your $500,000 home gets destroyed, or you have to pay to rent a new place while your flooded home gets repaired, you will still be out money. 

Luckily, there’s a solution to the federal flood insurance policy limits. You can seek excess flood insurance through private insurance companies to get additional coverage that takes care of more expensive properties. 

Now You’ve Got the Real Flood Insurance Facts!

You’re now flooded with the real flood insurance facts. So, you now see that flood insurance is often a good idea to supplement your existing homeowners or renters insurance.

But it also is not without its own limits. So, considering your personal coverage needs, home, and personal property values, and flood risk are still important.

Just think about the potential damage from even a small amount of water damage. You’ll then likely find the flood insurance premium is worth its cost!

If you’re interested in obtaining flood insurance coverage for your home, please check us out for a quote or more information.