6 Jan

The Importance of Carrying Flood Insurance

Flooding is a danger that can be easy to take for granted.  Like wildfires, earthquakes and other natural disasters some regions see more flooding than others and so for those who do not live in flood prone areas, there can be a sense that it can’t happen to them. However, if recent events are any indication, flooding is rapidly becoming a danger that everyone, regardless of where they live should be concerned with.  That is why it is recommended that everyone purchase flood insurance for their home.

Insurance

The high cost of rising waters

In 2013, Colorado experienced what is known as a “Hundred Year Flood.” Within three days a massive amount of rainfall caused the rivers to rise and swell, and an area of over 150 miles to experience flooding. Whole communities abandoned their homes, heading to high ground as telephone poles, vehicles and houses were swept away by the deluge. Roads were washed out, and in some areas destroyed, as the flash flooding triggered landslides. The total economic cost of the damage was estimated at around $2 Billion; with over 17,000 homes affected by the flooding, at an average cost of $200,000 to repair or replace them—not including contents. Much of Colorado is known to be at risk for flooding, and that is why in high risk zones homeowners are often required to purchase flood insurance; but did you know that over 30% of flooding occurs in areas of low-moderate risk?

When people think of floods, it often summons images of washed out roads, swollen rivers and the like, often in areas of high rainfall and snowmelt. But even in the desert, floods can, and do, occur. Death Valley is no stranger to flooding, in 2004 a massive flash flood swept through the dusty region, killing 2 and trapping many visitors and cars in a torrent of mud. Flood Smart, the National Flood Insurance Program website, describes a flood as “a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.” They can be caused by nature or man-made, and many home insurance policies will not cover flood-related damage.

Having coverage where you need it most

One thing that every insurance agent or broker will recommend to his or her clients is to make sure of what is really covered under their home insurance policy. Because property insurance covers events like fires, lightening and vandalism, it can be easy to assume that flooding would be covered as well. But there are some events that are too devastating for insurance companies to cover under a traditional home insurance policy, and because flooding has become such a high-risk event, a separate insurance policy known specifically as ‘flood insurance’ was created. Coverage generally costs around $300 per year and can be purchased up to a maximum of $250,000. Federally backed and regulated, flood insurance covers policy owners in the event that flooding occurs. This includes damage from mudslides; sewer back-ups due to flooding, and covers both the property and the contents of the house. It is also available for business owners, and for those who work in industries such as home building or farming, it can be a lifesaver, rescuing them from financial devastation.

If you are not sure if you should purchase flood insurance coverage, there are a few things you should consider. If a flood damaged your house to the tune of $200,000 would you be able to recover financially, and how long would it take?  Levees can break and flood barriers can fall, so having an extra layer of protection might pay off in the long run. Flooding is a threat that can no longer be ignored, as the size and frequency of events are increasing worldwide. Whether you live in a floodplain or in the Mojave Desert, flooding can and does occur. Having flood insurance can help cover you when it hits, protecting your livelihood, restoring your home, and helping you get back on your feet. Having flood insurance offers peace of mind that if the worst were to happen, it would not devastate homeowners financially.


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