Global Courant
What do you mean I’m not covered for flood damage? Sadly, millions of homeowners say in shock and sometimes horror every year.
Of course they never thought it could happen to them, after all they don’t live in a flood zone. But nonetheless, they faced a record-breaking rain storm, sewer back-up, or failed flood control in the province. The good news was one was injured, the bad news is they didn’t have proper flood insurance or even worse – they had no policy at all.
To help you avoid this fate, here are the top 10 mistakes most people make when it comes to buying flood insurance.
1. Assuming you have to live near a large body of water, flood plain, or low-lying areas to benefit from flood insurance.
Most floods are caused by a variety of causes apart from living near a large body of water. For example, rain, snow or ice storms, hurricanes and water or sewer backup, in addition to dam or other flood control failures and more.
2. Assuming your standard home insurance policy covers flood damage.
This is one of the main reasons why it is so important to stay informed and up to date with insurance matters. Why? Because most people assume they are covered against flood or water damage in their standard insurance policy. Surprise! You’re not.
It’s a fact that most standard policies don’t cover flood or most water damage. You need a separate policy or rider for this.
3. Assuming you can’t get flood insurance if you’ve been turned down by traditional insurance companies.
You can purchase flood insurance as long as your municipality participates in the National Flood Insurance Program.
4. Assuming all flood insurance is too expensive.
The average flood insurance policy costs just $353 per year for coverage.
5. Assuming Federal Disaster Assistance pays for the flood damage.
Federal disaster relief does not pay for flood damage. At best, it can help to make low-interest loans if you qualify — and only if the president declares the area where you live a disaster.
6. Assuming you don’t need flood insurance if you live in a low to moderate risk area.
Nearly 25 percent of all flood insurance claims come from areas of low to moderate flood risk.
7. Assuming you need to purchase full flood insurance.
You may be eligible for the Preferred Risk Policy (a less expensive flood insurance policy) which offers coverage starting at $39 per year.
8. Not sure what is covered by replacement cost and what is covered by actual cash value?
It’s important to find this out to make the most informed decision about what kind of policy to buy and who to buy it from.
9. Assuming you have flood insurance if you rent.
Your landlord policy only insures the building, not your personal property. You can, however, take out insurance for your personal belongings.
10. Take the first policy you come across.
The best method for buying the most coverage for the best price is to compare at least three different companies. You may be surprised at the price and/or service difference. Taking the time to follow and remember these 10 guidelines will help you avoid the mistakes many people make when buying flood insurance.
Flood Damage Update – Top 10 Mistakes When Buying Flood Damage Insurance
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