Do I need flood damage insurance?

 House protection is important, but less than 15 percent of homeowners in the U.S. have a separate policy to cover flood damage, and though cost is a main reason, another is the misconceptions people have about flood insurance. Here are some of the top misconceptions.

Homeowners insurance covers floods

One of the most common misconceptions about flood coverage is that homeowners insurance covers flood damage. Most homeowners insurance policies are very specific about what kinds of water damage they will cover. If a pipe breaks and floods your home or if you get water damage because wind or hail damage your roof or break windows, your homeowners insurance likely will cover the damage. However, if you get water in your home from an overflowing river or creek or a huge rainfall, house protection won’t cover it. In that case, only a flood policy would cover the damage.My area rarely floods, so I don’t need extra insurance

Another common misconception about flood insurance is that you only need it if you live in a flood-prone area. Though lenders require such insurance in federally identified flood zones, that doesn’t necessarily mean you don’t need it if you aren’t in one. Pretty much anywhere in the U.S. can experience flash flooding, so having a flood policy is an extra layer of protection for your home.

Depending on where you live, your flood risk can be high, moderate or low, and your insurance rates and requirements are decided based on your flood zone:

  1. High-Risk Areas
    There’s a 1 in 4 chance that a home in a high-risk zone will flood. That’s why homeowners in these areas are typically required to carry flood insurance by their lenders. Usually, they qualify for a Standard Risk Policy.
  2. Moderate-to-Low Risk Areas
    The threat of flooding in these areas is not as high.Even so, flood insurance may be something to consider, because residents in these areas have filed about 25% of all National Flood Insurance Program claims. Usually, homeowners in low-to-moderate risk zones can qualify for a low-cost Preferred Risk policy.