3 Facts You Should Know About Purchasing Flood Insurance
If you live in an area that is considered at high risk for flooding, there is a good chance that your mortgage lender will require you to purchase flood insurance. However, if you do not live in one of these areas or if your home is not mortgaged, the decision of whether or not to purchase this type of insurance coverage will be completely up to you. Before making this important decision, there are a few facts that you should know.
Fact #1: Most Homeowners Insurance Policies Exclude Flooding
It is quite common for homeowners to mistakenly believe that their standard homeowner's insurance policy will protect them in the event of a flood. However, the truth is that nearly all standard policies will exclude damage caused by flooding. This confusion is often caused by the fact that standard homeowners policies do offer coverage for water damage. The problem is that water damage and flood damage are defined differently by the insurance industry. While water damage is defined as damage that results from water that falls from the sky or comes from the home's plumbing system, flood damage is defined as damage resulting from rainwater that has already touched the ground. In order to ensure you are protected in both of these scenarios, you will need to purchase additional flood insurance coverage.
Fact #2: Even A Small Flood Can Cause Serious Damage
Many homeowners underestimate just how much damage a flood can cause. Even a few inches of water in the basement of your home has the ability to cause thousands of dollar's worth of damage. This is all damage that you will need to pay out of your own pocket to repair if you chose not to purchase flood insurance. Consequently, even if you find that you only need to file a claim one time in the entire time you own your home, there is a good chance that your flood insurance will eventually pay for itself.
Fact #3: Renters Are Also Eligible To Purchase Flood Insurance
If you think that you don't need to worry about purchasing flood insurance simply because you rent rather than own your home, you couldn't be more wrong. Even if your landlord carries flood insurance on the property, this insurance coverage will not extend to your personal belongings. In order to ensure the contents of your home are covered in the event of a flood, you will need to purchase your own flood insurance policy. The good news is that since your policy will extend only to the contents of the home and not the property itself, this type of flood insurance can be extremely affordable to purchase.