Is Flood Insurance Worth It? 7 Facts Homeowners Need to Know

is flood insurance worth it

When you’re reviewing your homeowner’s coverage, you might wonder: “Is flood insurance worth it?” Here are 7 important facts all homeowners need to know.

is flood insurance worth it

If you’re a homeowner or in the process of purchasing your own property, you’ve probably wondered what kind of insurance matters most for your home. And if you live in a coastal region or an area known for its unpredictable weather, you’ve probably asked yourself “is flood insurance worth it?”

With so many types of insurance out there–from fire to flooding– it can be hard to know what you need to do to keep your property protected.

Well, don’t fret, we’re here to help! In this article, we’re covering everything you need to know about flood insurance, including how it works, and when and why you should purchase it.

What is Flood Insurance?

Flood insurance is an insurance policy that protects your home, your belongings, or both, from damage caused by flooding. It often covers the physical structure of your home and its foundation, including coverage for your plumbing and electrical, as well as central air and heating systems. In most cases, it pays out on a replacement cost basis, or the monetary amount it would take to repair your home.

When it comes to personal belongings coverage, this insurance covers general things such as clothing, furniture for living rooms, bedrooms, and such, electronic, and any valuable pieces you have up to a specified limit. Most often this is paid out in cash.

7 Facts Homeowners Need to Know About Flood Insurance

Think that flood insurance breakdown is simple? Well, flood insurance is a bit more complicated than that! Here are some facts you need to know to decide if flood insurance is right for you.

Flooding is a Problem in Most States

Did you know all 50 states have experienced floods or flash floods in the last five years? Flooding is a serious issue to consider no matter where you live, or how likely the issue is to occur.

Flooding Isn’t Covered by Your Homeowner’s Insurance

Another thing you should know is that your homeowner’s insurance won’t cover any damage caused by flooding. So if you live in a state that’s prone to flooding, you should absolutely consider this insurance before you lose everything.

Avoidable Damage Isn’t Covered

While flooding insurance is great, it doesn’t cover all damage that may occur due to water damage. If your home is facing a case of mold or mildew, you may not be liable for insurance coverage if the insurance company deems the situation is avoidable. So when in doubt, take care of your home to the best of your ability and loop in your insurance provider sooner rather than later.

There’s Only Limited Coverage for Below-Ground Spaces

In general, flood insurance provides little to no coverage for below-ground spaces such as crawl spaces or basements. Don’t let that discourage you from buying flood insurance, however! Personal belongings coverage will usually cover any contents in those spaces, and those spaces can be covered with some additional under building coverage.

Flood Insurance is Relatively Cheap

At first thought, you probably assume that flood insurance is just another expensive type of insurance that isn’t actually needed. But the reality is that flood insurance is super cheap! Especially, if you get flood insurance from a company like Lloyds of London Flood Insurance.

Typical flood insurance only costs between $400 and $600. That’s a lot less than the average for flood damage, which averages out to about $40,000.

Your Realtor Can Help You Decide If You Need Flood Insurance

If you’re currently hunting for a new home, you should know that your realtor is responsible for informing you on any potential risk of flooding. They can tell you if your home is in a flood zone, or if it’s in a high-risk area for any other natural disasters. By doing this, you can make a more educated decision as to if flood insurance is right for your home.

There’s a Waiting Period Involved

Want to buy flood insurance for an impending storm? It may be too late. Most flood insurance policies have a 30-day waiting period before they go into effect.

So, if you live in an area that’s prone to flooding, you should buy your flood insurance as soon as possible. The last thing you want to do is buy it right before a big storm and find out your damage isn’t actually covered.

Final Thoughts on Flood Insurance

After reading this article, you know have an answer to your question, “is flood insurance worth it?” It certainly is! By purchasing flood insurance for your home you can rest easy knowing your home and valuables are protected in any worst-case scenario.

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