Flood Insurance

Flood insurance is something most people in the world do not even think about. Those living in higher elevations or away from large water sources fortunately do not even need it. Even if you don't think you need it, as a responsible homeowner, it's a good idea to refer to topographical maps to see exactly how "at-risk" you are. It is estimated that only 20% of American homeowners at-risk for flooding, are actually flood insured. Many insurance companies will not even offer flood insurance, as so few people seek it out. As a result, for those who are affected by floods, the insurance company will not make enough money from those who are both unaffected and also insured. To combat this problem, the U.S. government requires flood insurance to secure a mortgage backed by any federal agency.

Flood insurance is tricky, in that flood can be caused by a number of natural disasters; rain storms, landslides, hurricanes, earthquakes. But even for those who live in higher elevations, if the drainage system is not set up efficiently on a particular tract of land, your basement or first floor could easily sustain flooding damage. In California, for example, where many homeowners have earthquake insurance, but not necessarily flood insurance, a flood caused by an earthquake might not be covered.

As mentioned, private insurance companies often do not provide flood insurance, so it's going to take some lengthy research to find the best quote possible. In 1968, in response to a poll that found that most homeowners believe flood insurance is covered by their standard home insurance policy, the U.S. government created the National Flood Insurance Program. If your community participates in the NFIP, you can buy flood insurance through an insurance company in the NFIP program. If you're not sure, you can usually find this info on your town or county website. If need be, call or visit your local town office or city hall. You can also visit the NFIP website to see if your town is covered. FloodSmart.gov is another great resource for every flood insurance question imaginable. In other countries, insurance companies often require the insured to flood-proof their homes, or else they will be forced to pay significantly inflated premiums.

In the wake of Hurricane Katrina in 2005, many homeowners were left wondering if they would be covered by flood insurance in the event of such a catastrophic natural disaster. Aside from actually having the insurance, be sure to keep detailed records of everything in your home. Take photographs of each room and keep receipts for expensive items in a safe deposit box. Most people won't remember to grab such paperwork in a crisis situation, so it's always a good idea to have this stored elsewhere. Another important thing to remember: flood insurance policies will not take effect until 30 days after it's purchased. No matter where you live, it's always possible a hurricane will strike. If hurricane season is approaching in your area (for those on the south and east coasts), be sure to purchase it several months in advance. Always better to be safe than sorry.