Understanding Common Flood Insurance Myths
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As many states across the country raise awareness of the dangers of severe weather, it is crucial to highlight one of its very dangerous and costly side effects: flooding.
In this podcast episode, we team up with Gary Pozsik of Health, Wealth, and Happiness to discuss common flood insurance misconceptions and how to overcome them to ensure you’re protected against the effects of severe weather.
Show highlights
Myth: Homeowners’ insurance covers flood damage
Contrary to popular belief, standard homeowners’ and renters’ insurance policies do not cover flood damage.
Federal flood insurance, purchased through your insurance agent or company, is the only guaranteed flood insurance coverage available for your home.
Myth: Most people don’t need flood insurance
Flooding is the most common natural disaster in the United States. In fact, according to FEMA, 90% of all major natural disasters in the country involve flooding.
However, many people skip flood insurance coverage because they live outside the floodplain and therefore think they do not need it.
The truth is that everyone lives in a flood zone, as floods can be caused by storms, melting snow, hurricanes, water backup due to inadequate/overloaded drainage systems, and even broken water mains.
Myth: You don’t need to worry about flood insurance until a flood occurs
When it comes to flood insurance, it pays to think ahead. There is typically a 30-day waiting period between when you buy the coverage and when it kicks in. There are certain exceptions to this waiting period; examine your policy closely to find out if it has any.
It’s also important to consider that flood insurance policies usually will not cover a loss in progress, which is a loss that occurs as of midnight on the first day your policy goes into effect.
Myth: You can’t get flood insurance if your home has been flooded before
If your community is participating in the National Flood Insurance Plan, you can still purchase a flood insurance policy even after your home has been flooded.
Myth: Flood insurance will cover all kinds of damage
Flood insurance will cover a lot of your damaged property and personal items, but there are some things that are not covered under NFIP policies:
- precious metals, stock certificates, bearer bonds, and cash
- plants
- wells and septic systems
- septic systems
- walkways, decks, patios, and fences
- hot tubs, swimming pools, and boathouses
- retaining walls
- storm shelters and temporary housing
- loss of income
- cars or mold damage
Myth: Flood insurance won’t truly cover all the costs associated with flood damage
While it’s true that flood insurance may not ever cover all of the costs associated with flood damage, there are additional forms of coverage that can help you cover any gaps.
For example, consider replacement-cost home insurance, which insures your home for the amount it would cost to rebuild if it were destroyed.
Review your amount of replacement cost coverage every couple of years, as well as any time you make a major change/upgrade to your home.
You may also consider loss-of-use home insurance, which reimburses you for living expenses such as hotel rooms and restaurant meals if you’re uprooted from your home because of a disaster.
Don’t forget to keep an updated list and video inventory of your belongings, as this will help you replace and recover the true worth of your items if you need to file a claim. Learn more about how to create a video inventory with your smartphone.