Should I Buy Flood Insurance? What to Know Before You Buy

November 4, 2019

Over $8 billion in damages occurred due to flooding in 2011 alone. Floods cause so much damage, you want to ensure your home and belongings are at the very least insured.

You may be wondering if you’re someone who can be affected by floods. It prompts the question, should I buy flood insurance?

Below we will review what flood insurance is and if it’s right for you.

What Is Flood Insurance?

Should a flood happen, flood insurance will protect your home and personal belongings. This policy applies to floods created through natural means. For example, tropical storms, torrential rain, and overflowing rivers are covered.

You may be thinking, shouldn’t my homeowners insurance cover flooding? The answer is normally going to be no.

Homeowners insurance covers the basic protections of your house. It doesn’t typically cover floods unless you buy more expensive homeowners insurance.

You may not want to pay more for your homeowners insurance. If that is the case you can get another policy that just covers floods.

What Exactly Does Flood Insurance Cover?

Your home can become flooded in a variety of ways. Yet, if it’s not from an actual flood your home won’t be covered. For example, if a pipe bursts in your basement or there is sewer backup overflowing into your home.

The only time sewer backup would be covered is if it happened because of a flood.

If a flood does happen here are some items covered by flood insurance:

  1. Your home and foundation
  2. Your plumbing
  3. Your appliances (e.g. refrigerator, built-in dishwasher, stove, etc.)
  4. Central air-conditioning, furnaces, and water heaters
  5. Permanently installed items (e.g. wallboards, bookcases, cabinets, etc.)
  6. Debris Removal
  7. Drywall in your basement

You can buy Contents Coverage to get even more items covered, such as:

  1. Your personal belongings (clothes, furniture, electronics, etc.)
  2. Portable microwaves and dishwashers
  3. Carpets
  4. Your washer and dryer
  5. High-ticket Items (e.g. original artwork and furs)

What Isn’t Covered by Flood Insurance?

We like to think that everything we own will be covered, but that is never the case. Below we will list some of the items you won’t see covered:

  1. Mold and mildew that could have been avoided
  2. Cars
  3. Forms of currency, priceless metals, and valuable papers. These can include gold, silver, stock certificates, bearer bonds, etc.
  4. The belongings you own outside of your house. For example, wells, decks, patios, swimming pools, etc.
  5. Trees, plants, and shrubs on your property
  6. Loss of income

Where Do I live?

Where you live can play a big role in whether you want to buy flood insurance. Depending on what zone you live in will play a big part in what you decide.

V Zones

V zones will be the most flood hazardous zones. You’ll be at the highest risk of being hit by a flood. Typically, you’ll have a home close to the water (e.g. a beachfront).

A Zones

Generally, you’ll find A zones near water, but they don’t necessarily have to be. In these zones, your biggest concern is rising water. This can be from rivers, lakes, and streams.

Other Zones

Finally, you have X and D zones. X zones are your least risk areas, flooding won’t be a big concern of yours. It’s not as necessary to get flood insurance in these zones.

D zones are areas where not enough research has been done. These zones can be prone to flooding, but not nearly as much as A and V zones.

How Much Does Flood Insurance Cost?

If you live in a low to moderate risk area you won’t be paying as much for your flood insurance. If you live in these areas you’ll get what’s called a Preferred Risk Policy. You’ll pay as low as $119 per year with this policy.

Yet, if you live in a high-risk area you’ll have to be on the standard flood insurance policy. This insurance typically costs around $700 per year.

The Flood Insurance Waiting Game

Generally speaking, you have to wait 30 days before your flood insurance kicks in. It’s best not to wait until the last second to get it. If you buy it through a private seller, you may be able to shorten the waiting period to 10-14 days.

Some exceptions to this rule include:

  1. You’re updating your flood insurance policy. Once the old policy expires the new one will take effect.
  2. If your home is added to the high-risk Special Flood Hazard Area. Once on the list, you need to buy flood insurance within 13 months. If you buy insurance within that time-frame you only have a 1-day waiting period.
  3. If your home is on burned federal land and it increases your chance of flooding. There is no waiting period if you buy flood insurance within 60 days of the fire-containment date.
  4. If you’re buying flood insurance in connection with your mortgage. This can be getting, increasing or renewing your mortgage. You don’t have to worry about a waiting period at all!

These exceptions are provided by the Federal Emergency Management Agency. They were established to better protect people in high-risk flood zones.

Should I Buy Flood Insurance?

Have we answered the question, should I buy flood insurance? If yes, start looking into what you want from your policy. Do you want more coverage or less?

Your budget and location will play a role in how much you pay and how much coverage you’ll want.

If you want to know what to do after a flood, review our blog.