Floods can strike unexpectedly, turning homes and lives upside down. In many areas, traditional homeowners’ insurance doesn’t cover flood damage, making flood insurance a crucial safeguard for homeowners. In this blog, we’ll break down who needs flood insurance, what it covers, and why it’s essential for protecting your property… Check out our guide below.
Questions? Reach out to one of our knowledgeable agents. We’re eager to set you up with the right coverage and rate!
Who Needs Flood Insurance?
Homeowners in High-Risk Zones: If you live in a designated flood zone (often labeled as a Special Flood Hazard Area, or SFHA), flood insurance is usually mandatory if you have a mortgage backed by a federal institution. These areas are identified by the Federal Emergency Management Agency (FEMA) based on historical data and flood risk.
Homeowners in Moderate to Low-Risk Areas: Even if you’re outside a high-risk zone, flooding can still occur. About 20% of flood claims come from properties outside these designated areas, according to FEMA. If your home is in a moderate to low-risk area, purchasing flood insurance can provide peace of mind and financial protection.
Business Owners: Commercial properties can also benefit from flood insurance. If your business is located in a flood-prone area, having coverage can help mitigate potential losses and keep your operations running after a disaster.
Renters: Renters can also consider flood insurance. While the landlord’s policy covers the building, your personal belongings typically aren’t included. A renters’ flood policy can protect your valuables from water damage.
What Does Flood Insurance Cover?
Flood insurance is typically divided into two main components: building coverage and personal property coverage.
Building Coverage: This part of the policy covers the structure of your home, including:
- The foundation.
- Electrical and plumbing systems.
- Major appliances (like water heaters and HVAC systems).
- Permanently installed carpeting and cabinets.
- Detached garages and other structures on your property.
- Personal Property Coverage: This component protects your belongings, such as:
Furniture and electronics.
- Clothing and personal items.
- Valuable items (though there may be limits on certain collectibles or artwork).
- Some types of outdoor property, like grills and patio furniture.
It’s important to note that standard flood insurance does not cover damage caused by mudslides or sewer backups, so you may need additional policies for those risks.
Why You Should Consider Flood Insurance
Natural Disasters Are Unpredictable: Climate change has led to increased flooding risks in many areas, even those previously considered safe. Having flood insurance ensures you’re prepared for unexpected weather events.
Financial Protection: Flood repairs can be incredibly costly, often reaching tens of thousands of dollars. Flood insurance can help cover these expenses, preventing financial strain.
Peace of Mind: Knowing you have protection in place can provide peace of mind, allowing you to focus on other aspects of your life without the looming worry of potential flood damage.
Flood insurance is an essential consideration for homeowners and renters alike, regardless of their property’s location. With the potential for significant financial losses from flooding, investing in flood insurance can provide crucial protection and peace of mind. If you’re unsure about your flood risk or coverage options, consulting with an insurance professional can help you make an informed decision tailored to your needs. Don’t wait for the next storm—take proactive steps to safeguard your home today!
This article is for informational purposes only. You should not act based on this information without first consulting with your insurance agent; if you would like a quote from a Cornerstone Insurance Agency licensed agent, contact us. We disclaim all liability for actions taken or not taken by you based on the contents of this article which is provided “as is.” Cornerstone makes no representation that this content is error-free.