Why Should You Buy Flood Insurance?
Every year, somewhere in America, we are exposed to stories about flooding and the wreckage left in its path. But you don’t need to live near a river or other body of water to be at risk for flooding in your home. Floods can happen almost anywhere and without flood insurance your home and property may be destroyed and you would have no way to replace it.
Most homeowner policies exclude flood damage. Why? Because it puts the insurance company at a higher risk for financial ruin in the case of devastating floods in an area. Flood insurance is usually placed as a rider to an existing policy or bought separately.
So, how do you protect yourself with flood insurance? First, we should take a look at the main causes of floods, and how much you are at risk depending where you live.
Flood causes
Flooding is most frequently caused by natural weather. But flooding can be localized due to broken water mains or even dam spillage.
Rain
Most of the flooding that you see on television is caused by large amounts of constant rainfall which causes rivers and tributaries to swell beyond their banks. Water then fills a “floodplain” or low-level land near the rivers. Any city, town, or residential area located on the floodplain is at risk for flood damage.
Desert cities are prone to flash flooding during heavy and sudden rainfall. The dry, hard ground does not soak up the rain so water collects and flows to the lowest areas.
Snowpack
Mountain snowpack during a spring thaw may melt at a faster than normal pace. The melted snow fills river tributaries and spills into main rivers and flooding may occur downstream in lower elevations.
Hurricanes/tropical storms
Fierce oceanic weather that hits land can bring torrents of rain that causes floods. Coastal cities, especially in the Gulf Coast and Eastern seaboard, are at risk for hurricane flooding.
Other causes of flooding could be:
- Coastal floods / Tsunamis
- Broken Dams or Levees
- Broken Water Mains
What is your risk?
The National Flood Determination Association (NFDA) has historical data that provides a way to determine if a specific area has a pattern for frequent flooding. Flood plains are rated as frequent or infrequent. For instance, a 25-year flood plain is considered frequent while a 100-year flood plain is not.
By tracking recurring floods insurance companies can better determine the risk of homes and property. Mortgage companies require flood insurance for homes in frequent flood plains.
Your flood risk is how you should determine your need for flood insurance. Look carefully at a flood determination for your area and decide if flood insurance is worth the risk.
Flood insurance can be very affordable, even as little as $100 a year in some areas. Combined with your hazard coverage flood insurance can give you peace of mind if there is a catastrophe.
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