Lots of us are looking for ways to save money these days, and it’s tempting to reduce your insurance coverage to save a few hundred dollars each year. Sometimes revisiting your insurance coverage is a great idea; adjusting deductibles or selecting new coverage can save you money in the end. But eliminating flood insurance generally isn’t the best way to go—even if you don’t live in a “flood zone.” Here’s a look at why:
- Your homeowners insurance policy doesn’t cover damage caused by a flood. If you eliminate flood insurance, you’ll be responsible for any damage that occurs as the result of a flood.
- Floods cause more damage than any other natural disasters in the United States. Because floods are often unpredictable, you can’t prepare for them as you would for hurricanes, for example.
- Floods frequently happen outside the “flood zones” specified by the government. These zones merely represent the highest risk areas.
- A flood doesn’t cause only damage to the contents of your home; it can also cause structural damage to your home or business. These repairs can be incredibly costly, and you may have to foot the bill for a hotel or rental home while the repairs are completed.
Ultimately, paying a small amount each month for insurance will save you the headache of a huge payout in the event of a flood. If you’re considering reducing or eliminating your flood insurance, talk to a qualified insurance agent first. She may be able to find flood coverage that works for you and your budget.