It depends. Powerful storms, inadequate drainage, melting snow, and hurricanes can all cause serious flooding damage, even if you don’t live in a high-risk flood area. According to the National Flood Insurance Program (NFIP), approximately 20% of all flood insurance claims come from areas that are at low to moderate risk for floods. (Source: National Flood Insurance Program, October 2014) Since standard homeowners insurance generally does not cover damage directly caused by flooding, you may want to consider purchasing flood insurance if you live in an area of the country that is prone to severe weather systems that could result in flood damage to your home.
If you do plan on purchasing flood insurance, it is important to note that you can’t simply buy flood insurance as an endorsement to your current homeowners policy. Instead, if you are eligible, you can purchase a separate flood insurance policy through an insurance company that participates in the NFIP.
A flood insurance policy provides flood protection for both your home and its contents. You can purchase up to $250,000 of coverage for the building itself and up to $100,000 of coverage for the contents. If the value of your home exceeds the amount available through the federal program, you may be able to buy excess flood insurance through a private insurer. Excess flood insurance covers amounts above the $250,000 federal limit and, unlike NFIP coverage, may cover your home for its full replacement cost.
Keep in mind that even though flood insurance offers some degree of protection for flood-related basement damage, it doesn’t cover all types of damage. It also doesn’t cover events such as seepage or failure of a sump pump, and damage caused by sewer backups unless it is directly related to a flood. For more information on flood insurance, visit http://www.floodsmart.gov/.
If you have questions or need assistance, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
