Flooding is the most common natural disaster in the United States, and its effects can be devastating. However, many people are still unsure about how to protect their homes and businesses with flood insurance. Did you know that according to FEMA, the average annual cost of flood damage in the U.S. exceeds $2 billion? With climate change and continuous development in flood-prone areas, this figure is expected to rise by over 60% in the next 30 years.
If you’re a property owner, now is the perfect time to get informed about your flood risk and explore flood insurance options. It’s essential to consider flood insurance, regardless of how close you are to a body of water. Floods can happen anywhere and lead to costly damage for unprepared property owners. Let's clear up some common myths about flood insurance that might be confusing to homeowners and commercial property owners.
Myth 1: The National Flood Insurance Program (NFIP) is the Only Option
Many people think that the NFIP, managed by FEMA, is their only choice for flood insurance. While the NFIP does offer protection, it might not be the best fit for everyone. For example, the NFIP provides a maximum of $250,000 in coverage for homeowners and up to $500,000 for businesses. This might leave your property underinsured.
Private flood insurance, on the other hand, can usually offer more comprehensive coverage options, often at a lower price. Private insurance policies are typically backed by some of the world’s largest and most established carriers in the world with strong financial ratings. These private insurers often provide additional coverage options, such as living expenses if you are displaced from your home due to a flood, business interruption services, and protection for basement contents—benefits not available from the NFIP.
While many Realtors, lenders, agents, and brokers may point property owners to the NFIP out of habit, knowledgeable consumers should also request a quote from the private flood insurance market. You might be pleasantly surprised by the options available to you!
Myth 2: My Homeowners Insurance Policy Covers Flooding
This is a big misconception that can lead to costly mistakes. Standard homeowners policies cover many things like fire, theft, and some types of water damage, but flooding is specifically excluded in most policies. This means that if your home is damaged by rising waters, you'll be responsible for all the repairs and replacements out of your own pocket unless you have a separate flood insurance policy.
Even if you don't live in a high-risk area, it’s a good idea to look into flood insurance. Just a few inches of water can cause thousands of dollars in damage, and flood insurance can help provide peace of mind.
Myth 3: I Don’t Need Flood Insurance If I Don’t Live Near Water
Flooding can happen anywhere, even if you don’t live on the coast or near large bodies of water. There are multiple types of flooding, including Riverine flooding which happens when rivers overflow due to heavy rain or snowmelt. Coastal flooding is caused by storm surges and high tides. Flash floods develop rapidly from intense rainfall, often in dry areas. Lastly, urban flooding occurs when drainage systems in cities are overwhelmed.
According to FEMA, 25% of flood claims come from areas considered low-to-moderate risk. So, even if you don’t live in a designated flood zone, you could still experience flooding. Considering how affordable some flood insurance policies are, it’s worth looking into even if you’re far from the ocean or a river.
Myth 4: All Flood Insurance Policies Have a 30-Day Waiting Period
While it’s true that many flood policies include a waiting period to prevent people from buying insurance only when they know a flood is imminent, the length of this waiting period can vary. For instance, the NFIP generally has a 30-day waiting period, but private flood insurance policies typically come with a shorter waiting period ranging from 0 to 15 days.
Additionally, if you're purchasing or refinancing a home and flood insurance is required by your lender, the waiting period is waived. Therefore, it’s smart to get your flood insurance in place right away to avoid any last-minute hassles.
Myth 5: My Property Has Never Flooded, So It Never Will
Just because your property hasn’t flooded in the past doesn’t mean it won’t in the future. According to FEMA, approximately 25% of all flood damage occurs outside a high-risk flood zone. And while FEMA’s flood maps are helpful, they don’t always tell the whole story. Flood zone maps only cover one-third of the 3.5 million miles of streams and just 46% of shorelines in the U.S, according to the Associate of State Floodplain Managers. Further, most of these maps are not updated regularly and often fail to consider rapid rain accumulation, climate change, and population expansions, according to Bloomberg.
Flooding can happen due to unexpected causes like rapid rain accumulation or new construction changing the way water flows in your area. With climate change and increased rainfall in many parts of the country, properties that were previously considered “safe” are now more at risk. It’s better to be safe than sorry, and flood insurance can help protect your home from unpredictable weather events.
Take Action and Protect Your Property
Flooding is a year-round risk that can happen anywhere. By understanding the realities of flood insurance and debunking these common myths, you can make an informed decision about protecting your home or business.
Reach out to one of our flood experts at FloodPrice.com to learn more about your flood risk or visit FloodPrice.com to get an online flood quote in minutes. Looking to compare an NFIP quote with private flood insurance? We offer both! Give us a call at 866-503-5663 and let us shop for you.
Flood insurance doesn’t have to be complicated or expensive. Stay safe, stay informed, and protect what matters most!
