Floods are among the most frequent and costly natural disasters in terms of economic loss. As much as 90 percent of the damage related to all natural disasters (excluding droughts) is caused by floods and associated debris flows.
So what would happen if disaster strikes and your home were flooded? Surely, your homeowner’s insurance will cover the damage. Think again. Basic homeowner’s policies DO NOT always cover flood damage. You need flood insurance — a special policy backed by the federal government.
Even though flood insurance is relatively inexpensive, only about one-quarter of the homes in areas most vulnerable are insured against flood loss, according to the Federal Insurance Administration. According to the Federal Consumer Information Center, almost 25% of all flood insurance claims come from areas that were not considered high risk, so that means everyone lives in a flood zone.
If there is a flood warning or watch in your five-day forecast, don’t bother running out to purchase flood insurance – you’re already too late. Flood insurance typically does not take effect for 30 days. Ask your insurance agent for the details about exceptions.