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Flood: Coming to a Home Near You

Thursday, May 28, 2020

The truth is, regardless of where you live in the U.S., flooding can occur just about any time of the year. Progressively, it seems that weather-related events are getting more severe as well. Just ask those who live in Houston, TX, where over 50 inches of rainfall fell over five summer days in 2017. Hurricane Harvey went down in the record books as the worst rainfall event in our country’s history. With damages in the billions, some experts estimate that nearly 80% of homeowners impacted by Harvey were not protected by flood insurance either.


If you own property in coastal areas or next to a river, the risk of flooding seems obvious, securing flood coverage can be a requirement. But what about those of us that don’t live in flood-prone areas, should you purchase flood insurance? The answer is, maybe.

There seem to be common misconceptions regarding flood insurance that many homeowners make:

“My current homeowner’s policy covers flood.”

Generally speaking, a homeowner’s policy will not cover flood damage. Flood policies are separate and distinct, having different rules and exclusions. Flood insurance is not a last-minute proposition, either. You cannot wait until an impending storm to purchase; there is a 30-day waiting period before coverage begins. Conversely, most comprehensive personal auto policies will automatically cover losses due to floods.

“My home has never flooded. I am not in a flood zone. I don’t need flood insurance.”

Quite the opposite is true. We all need flood insurance more than ever. Flooding and the losses associated have reached historic proportions in recent times. In the U.S., there were weather disasters that totaled up to fourteen billion-dollars in damages last year. According to the most recent survey conducted by the Insurance Information Institute in 2018, 15% of American homeowners have a flood insurance policy, from 12% who had coverage in 2017. It is alarming that even though the percentage has grown, there is still a low percentage of American homeowners that have a flood insurance policy. Nearly 25% of flood insurance claims come from areas mapped outside high-risk “flood-zone” areas.

When analyzing the Harvey flood, the overall design of the city contributed to the severity of losses. It was an example of how modern urban hardscape creates an impervious barrier of concrete where groundwater cannot be efficiently absorbed into the soil. A perfect storm, so to speak, that enhances the effects of the unwanted water and results in greater loss due to floods than in years past. As communities develop and change with roads or new buildings, so too will water collection.

“Flood insurance is way too expensive.”

Flood insurance is likely more affordable than you may think. According to FEMA and the NFIP (National Flood Insurance Program), residential premiums in moderate-to-low-risk areas start as low as $57 per year for contents only coverage, and for a comprehensive policy, the national average is $700 a year. Private flood insurance is also on the rise with new players emerging, creating a more competitive environment and overall appetite for flood-prone risks.

“I already have a basic National Flood Insurance Program policy.”

NFIP defines a flood as “a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.” This particular wording in your policy is essential to understand as it can mean the difference between having or not having coverage. In general, the maximum coverage limits afforded by the NFIP policy are, at times, insufficient to cover the full extent of a significant loss.

The good news is that more comprehensive options do exist. Private carriers are offering policies with broadened definitions of a flood, higher coverage limits with replacement cost for your home and possessions. They can provide for loss of use (paying for a wide range of expenses incurred while being forced out of your home in a temporary living arrangement). They may even include coverage for additional perils such as landslide, mudflow and earthquake.

Be Informed – Ask an Expert

While flood insurance may not be needed by everyone, it is important to understand your options. Flood policies can be complex, so make sure to discuss with a qualified insurance professional who can help you evaluate your overall needs. Seek out a firm that specializes in individual risk management and has direct access to the wide range of carriers who offer the best coverage available.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.