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Flood Insurance: Why You Should Buy It (Even If You aren’t in a Flood Zone)

There is a very common misconception among homeowners when it comes to the need for flood insurance. Many believe that if they don’t live in a flood zone they don’t need it. There are two problems with this train of thought. First, everyone is susceptible to flood and second, everyone lives in a flood zone.

What’s a Flood Zone?

The Federal Emergency Management Agency (FEMA) designates flood zones. The truth is that every single one of us lives in a “zone” on the flood map. The real question is whether or not you live in a zone that is deemed low, moderate, or high in terms of actual flood risk.  Those who live near large bodies or water, especially the ocean, tend to be in high-risk flood zones.

The type of flood zone you are in will often determine whether or not you are required to purchase flood insurance in order to obtain a mortgage or home equity loan.  Flood is generally excluded from the average homeowners policy, and most lenders are federally obligated to ensure you have flood insurance on your property in order to maintain their federal backing.

Why You Need Flood Insurance

Even if you aren’t in a high risk flood zone, flood insurance is something you should seriously consider adding to your portfolio. Ocean and river floods aren’t the only type of “flood” that can cause damage to your property. Let’s say a tree falls and your neighbor’s above-ground pool is destroyed, allowing thousands of gallons of water to run towards your home. This may count as a flood and if you don’t have the right coverage you may not be able to get the repairs your home needs.

Why You Need Flood Insurance Now

Don’t wait until you hear about a potential storm or fear some other sort of disaster to start looking for flood insurance. There is a 30-day waiting period from the date of application for a policy to go into effect. If a storm is on the horizon, for example, or hurricane season is starting and is very active, many insurers will temporarily stop accepting new applications. It pays to be prepared.

Those who live in high risk flood zones will find flood insurance to be relatively costly, starting at around $600 and up depending on the value of the home in question. Those who live in low and moderate risk zones will pay far less, in some cases only a couple of hundred dollars a year. It’s certainly an investment worth asking your insurance agent about.