Did you know that regular home and business insurance policies generally don’t include coverage for flood damage? Getting protection for floods requires a separate, special insurance policy. It can be tempting to skip flood insurance if you’re not in a flood-prone area because it seems unnecessary. If you in a flood prone, flood insurance can also be expensive, as insurance companies set their rates based on the likelihood of having to pay for a claim.
The fact is however, that most properties in flood prone areas will in fact eventually experience a flood. That’s different than, say, car insurance, where your car may or may not ever incur damage that would require payout from the insurance company. Lawmakers and insurance companies continually grapple with the best way to regulate insurance prices to protect consumers.
One trend is that is a bit disturbing is that housing developments are increasingly being built in areas that are more prone to floods, whether from heavy rainfall, melting snow, or other natural causes. Many of these homeowners either assume that their home insurance policy will cover them for flood damage, or they choose not to invest in flood insurance to save money. The reality is that flood insurance makes sense regardless of your perceived risk. Floods happen even in areas that are not considered “flood zones,” and the cost of repairing flood damage can be astronomical. A good analogy might be that healthy people still choose to have health insurance, because it’s less expensive to pay for the coverage than it is to pay for an emergency medical problem. The same holds true for flood insurance.
If your home or business needs flood insurance, talk to a qualified insurance agent to discuss the best options for you. Purchasing the right flood insurance policy can save you money and time when you need it most.
