Climate change. It’s here and it is changing the way we live and our expectations. Formerly dry places may get wetter, and unexpected water can cause a lot of damage, especially in locations where runoff has no place to go. According to the Federal Emergency Management Agency (FEMA), a mere two inches of water can cause $8,000 worth of damage to an average home.
So the question is: Do you need flood insurance?
Homeowners insurance covers damage from water falling down. What it doesn’t cover is water entering a house from the ground up, in other words, a flood. A flood is defined as a “condition of partial or complete inundation of two or more acres of normally dry land or of two or more properties (one being yours) from overflow of inland or tidal waters or runoff of surface waters from any source.”
Now that El Nino is upon us and the rains are coming down, lots of folks are thinking that they may need this extra coverage. If your property is in a flood zone and you have a mortgage, your lender has already required it. If not, it’s up to you to go out and get this extra protection. And you can’t wait until the water starts accumulating. The insurance companies are hip to this, and usually coverage becomes effective up to 30 days after you request it. So you have to think ahead.
You’ll have to read the fine print when you get that policy to understand what is covered and what items are excluded. Anything outside the property, like your cars or lawn furniture, is on you. Money, precious metals and valuable papers, are not recoverable. And you will have a hard time collecting on moisture, mildew or mold that could have been prevented with homeowner care.
Flood Insurance is available through the National Flood Insurance Program offered by FEMA, which reports that between 2010 and 2014, the average claim for flood damage was about $39,000. Since the average flood insurance program was reported at $700 a year, this seems like a pretty good investment.
Private insurance is also available. You can go online with FEMA, and estimate the cost of flood insurance for your home. The cost is calculated based on the risk factor of your neighborhood and can vary quite a bit.
We all have to adapt to changing conditions, and more water is definitely on the list. The icecaps are melting, the oceans are getting warmer and the water has to go somewhere. To make sure it doesn’t set you back a mint when it finds its way into your house, flood insurance may be your new best friend.
