Flood Insurance:  What Homeowners Need to Know

Flood Insurance: What Homeowners Need to Know

Did you know that having a homeowner’s insurance policy doesn’t mean you have flood insurance? In fact, standard home insurance does not include flood insurance. And as flooding becomes more common, you may want to consider getting it.

That’s because flood damage to your home can be very expensive. Just one inch of water in an average home can cost about $24,000 in cleanup and repairs, according to the Federal Emergency Management Association(FEMA). One foot of water can cost more than $44,000 in restoration costs. And those figures don’t include the cost of replacing damaged personal possessions, which can cost tens of thousands more.

Those costs aren’t covered by insurance? 

Typical homeowner’s insurance policies do not cover flooding. Your homeowner’s insurance policy will usually cover water damage from a burst pipe, but will not cover flooding from rainfall, storm surge or other flooding events. 

To be covered for those types of events, a homeowner must purchase a separate flood insurance policy. In the United States, flood insurance is backed by the government-run National Flood Insurance Program(NFIP).

Who needs flood insurance?

If your home is in a high-risk flood zone and you have a mortgage, your mortgage lender will require you to purchase flood insurance. You can search your home address at Flood Tools or on FEMA’s Flood Insurance Rate Map to learn the specifics of your flood risk. 

The Flood Insurance Rate Map may rank your location as “Area of Minimal Hazard,” or “0.5 PCT Annual Chance of Flood Hazard,” or even “Special Flood Hazard Area.” 

Even if your mortgage lender doesn’t require flood insurance, you may still need it. One reason is that the flood insurance maps are based on 100-year floodplains, but changes in the environment, as well as manmade developments, are leading to changes in the flood zones. 

For instance, current floodplains in the United States are expected to grow by about 45 percent by the end of this century, according to FEMA research. So just because your home wasn’t in a high-risk flood zone when you purchased it, that doesn’t mean it may not be at high risk for a flood now. 

As the sea level continues to rise, new commercial and housing developments change the landscape, and we experience more extreme weather events, flooding may be more likely in your area than it once was. About one-third of flood insurance claims occur at homes that are not included in the high-risk flood zone, according to research.

How can I purchase flood insurance? 

While flood insurance is backed by the government through NFIP, you have to purchase it through an insurance company or agent. About 80 different insurance companies partner with NFIP to provide flood insurance.

Your licensed Gabi agent can help you find an insurance company that offers flood insurance and discuss your options anytime!

How much does flood insurance cost? 

The amount you’ll have to pay for flood insurance depends on the flood risk to your property. The average flood insurance policy costs about $700 per year, but many homeowners pay much less than that if their homes are at lower risk for floods. In many cases, homeowners pay about $36 to $40 per month to protect their homes from flood damage. 

If you’re thinking about flood insurance or have questions on your existing coverage, email advisors@gabi.com for assistance.


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