Floods in the United States result in more than $8 billion a year in losses, according to National Geographic. Water damage, along with secondary problems like mold growth, can ruin structures and belongings. Without flood insurance, the cost to repair, rebuild, and replace homes and businesses can be substantial.
No property is completely safe from flooding. That is why many home and business owners rely on it. The National Flood Insurance Program (NFIP) works with countless insurance companies to provide homeowners, renters, and business owners with policies up to $500,000 in coverage for buildings and their contents.
While most people know the basics of what a flood policy does, there are still some misconceptions about flood insurance. Here we will debunk these common myths.
Common Myths About Flood Insurance
Floods are the most common natural disaster in the U.S. and can cause irreversible damage to structures and possessions. Flood insurance is an effective way to protect a home or business, especially those living in high-risk areas. Acquiring a policy is an easy and straightforward process but it is important not to buy insurance without knowing all of the facts.
There are many myths surrounding flood insurance, such as that you cannot buy the insurance policy in a high-flood-risk area or that you cannot buy a flood policy immediately before or after a flood. It is also a common myth that it can only be purchased through the NFIP directly, as NFIP flood insurance is commonly sold through private insurance companies and backed by the federal government. Other common myths about flood insurance include:
Homeowners Insurance Covers Floods
Homeowners insurance is designed to protect a home’s structure and belongings in the event of a destructive incident, such as a fire. While not required by law like car insurance, most mortgage lenders require homeowners to acquire a homeowner’s insurance policy. As homeowners insurance does protect against various natural disasters like wind, wildfires, lightning strikes, and hail, most people assume that it also covers floods. However, most standard homeowner’s insurance policies exclude damage caused by floods and earthquakes.
Water damage caused by flooding is not covered by homeowner’s insurance as the event is considered gradual rather than a sudden or accidental event. A homeowner’s insurance policy may; however, pay for water damage caused by broken or burst pipes. A homeowner may need a separate flood insurance policy if they live near a river, on a coastal region, against a hill that experiences mudslides or in a recognized flood zone. Even if a person does not live in a high-risk flood zone, having an insurance policy can provide a sense of security.
Damage From Floods Is Not Significant
Some home and business owners neglect to acquire a flood insurance policy due to the common misconception that floods do not cause significant damage. According to FEMA, just 1 inch of water can cause an estimated $25,000 worth of damage to a home. The higher the water rises, the more damage to the structure and its contents.
When water damages a home or building, construction materials become saturated or water-logged. Some materials can be safely dried out with help from industrial fans and heat sources. However, certain materials like carpets are prone to mold growth and will usually need to be replaced. In addition, furniture, rugs, clothing, electronics, and other belongings can be damaged beyond repair. It can be used to help cover these major expenses and ensure a safe and hygienic living environment.
Flood Insurance Can Only Be Purchased By Homeowners
Many people associate flood insurance with home damage, but homes are not the only type of structure damaged during floods. Businesses can also suffer irreversible damage when flooding occurs, especially those built in high-flood-risk zones. It is available to commercial owners and building renters who want to protect their commercial buildings and belongings like office furniture.
It is also available to condo and apartment renters. Even if a person does not own the building that they live in, it can be used to cover the items inside like furniture, clothes, and electronics. Do not make the mistake of not acquiring a policy due to the chance of obtaining FEMA disaster assistance. It will protect a policy owner even if the event is not severe enough to be considered a disaster.
Talk To An Experienced Business Insurance Agent Today
Home and business owners often underestimate the extensive damage that a flood can cause to a structure and possessions. Without flood insurance, just one disaster could result in thousands of dollars in damages which may be too expensive for the owners to repair or rebuild. To learn more about flood insurance or to acquire a flood insurance policy for a home or business, reach out to the experienced business insurance agents at JMG.