Whenever there is a flash flood on the road, you have a potential flood insurance claim. Lots of homeowners don’t think that flooding will affect their property. Yet, in the past five years, all 50 states experienced a flood. Unfortunately, statistics show that the majority of people affected by these floods did not have flood insurance.
Insurance professionals should help homeowners get their lives back after any disaster. After a catastrophe’s aftermath, they may inquire about their policy. They check what is under coverage. Here are the myths in flood insurance. People should respond to this whenever their customers have questions:
1) All homeowners’ insurance policies cover flood damage.
A significant percentage of American homeowners do not have flood insurance. Lots of people believe that their homeowners’ policy provides coverage in case of a flood. Usually, the standard homeowners’ insurance policy does not cover a home’s flood damage.
Homeowners may buy flood insurance from the National Flood Insurance Program. They may get supplemental coverage from private insurance companies.
2) Only certain homes are within flood zones.
Everyone resides in a flood zone. Some flood zones have a higher risk of flooding than others. High-risk areas have a one in four chances of floods during a 30-year mortgage. Low to moderate-risk zones experience fewer floods. Yet, they submit a high percentage of NFIP claims. They also get 1/3 of the federal help for floods.
Not everyone may live in a high-risk flood zone. Mortgage companies usually need those who live there to carry flood insurance.
3) A 100-year flood zone may experience a flood once every century.
There are 25-year, 50-year, 100-year, 500-year, and 1,000-year flood zones. These terms refer to a flood’s probability of occurrence. The 25-year flood has a 4% or one in 25 chance of occurring. A 100-year flood has a 1% chance of happening every year. The lowest risk is in the 1,000-year flood with 0.1% chance every year.
But, this does not mean that a flood in a 1,000 or 100-year zone may not occur. Most of Baton Rouge, Louisiana was in a 1,000-year flood zone. Yet, that region suffered devastating floods. The terms also do not mean that flood will only happen once in that period. According to the U.S. Geological Survey, an overflow may occur more than once in 100 years in a 100-year flood zone.
4) Flood insurance is only necessary for high-risk areas.
Anyone may get flood insurance despite your home’s risk level. There may be locations that have a risk of flood. But, that does not mean that low-risk areas will not experience any problems. A quarter of flood insurance claims come from homes that are not in flood plains.
Flood risk may change over time. Areas with environmental changes and new developments might be more susceptible to floods. It may happen even if they were not prone to this in the past. Whenever this happens, mortgage companies need property owners to buy flood insurance. They should get it if they don’t have it yet.
5) Flood insurance may cover repairs and replacements for everything.
The NFIP’s flood insurance policies only cover $100,000 for belongings. It covers $250,000 for structural damage. The exact coverage may vary. There are differences with commercial property owners, single family homeowners, and renters. Private insurance companies have their list about what is under coverage.
Even if there are exceptions, flood insurance payouts are high. They amount to billions of dollars in damage yearly. Last June 2016, the NFIP paid for the top 10 costliest U.S. floods. The cost is close to $33.5 billion. Almost half of the total came from claims from Hurricane Katrina. The storm created $16.3 billion in payouts. These are for victims from Tennessee, Mississippi, Georgia, Florida, Alabama, and Louisiana.
Flood insurance may not be in the mind of all property owners. Yet, it is more important than what most homeowners think. You might encounter people who don’t know about their flood risk. Always remember these facts.
At NoBSFloodInsurance we take pride in making sure our clients are well protected at prices they can afford. To learn more about how we can help you, please contact our agency at (800) 747-5311 or Click Here to request a free quote.