Between atmospheric flows in California, Hurricane Ian in Florida, flash floods in Kentucky and monsoons in Las Vegas, flooding has caused billions of dollars in damage in the past year alone.
You may not think that flooding could ever affect your home. However, according to the Federal Emergency Management Agency, 90% of natural disasters in the US involve flooding. And if your house does flood, your homeowners insurance probably won’t help.
Do you need flood insurance?
Many people assume their homeowners insurance covers flood damage, but that’s generally not true, says Michael DeLong, research and advocacy associate at the Consumer Federation of America.
Flooding is different from the water damage your homeowners policy typically covers, such as: B. by a burst pipe. In the insurance industry, floods are excess water from sources such as overflowing rivers, floods or rainfall that cannot drain away quickly enough. Almost every household contents insurance excludes this type of damage. So if you want coverage you will need separate flood insurance.
Many people buy flood insurance because they have to. FEMA designates certain locations as “special flood hazard areas” that have at least a 1% chance of flooding in a given year. If you live in an SFHA and have a state-backed mortgage, your lender will require flood insurance.
Most homeowners outside of FEMA’s high-risk zones don’t get flood insurance — but that could be an expensive mistake. According to FEMA, about 25% of flood insurance claims originate from low- and intermediate-risk areas.
A map limit shouldn’t determine whether you get flood insurance, FEMA press secretary Jeremy Edwards said in an email. “Where it can rain, it can flood.”
And don’t rely on federal disaster relief if you decide not to get flood insurance. The maximum FEMA grant to help flood victims rebuild their homes is $41,000, but most payouts are significantly lower. Compare that to federal flood insurance, which pays up to $250,000 for your home’s structure.
How to assess your flood risk
While FEMA’s maps are a good place to start, they’re not the only place to check your home’s risk of flooding. At RiskFactor.com you can see the probability of your home flooding now and up to 30 years in the future. The site is a product of the nonprofit First Street Foundation, which uses scientific research to model the effects of climate change.
Unlike FEMA’s maps, which have historically focused on coastal and riverine flooding, risk factor maps also reflect the risk of flooding from heavy rainfall. Because a warming atmosphere can hold more moisture and produce more rain, scientists believe these types of floods will become more common with climate change.
Risk Factor also shows how much flood damage could cost in different scenarios. This information can help you make an informed decision about purchasing flood insurance.
“Can you pay out of pocket if this rare event occurs?” says Matthew Eby, founder and CEO of the First Street Foundation. “If not, then you should definitely think about insurance.”
Note that “a model is a model,” says Eby, and not a definitive prediction of what will happen. If Risk Factor says your home is at risk of flooding, Eby recommends doing further investigation by speaking to your community’s flood plain manager. Your state or local government can help you find their contact information.
If you’re considering buying a new home, ask the seller if the home or neighborhood has ever been flooded in the past, DeLong says. Certain states, such as Texas and Louisiana, require sellers to provide this information.
How to get flood insurance
Most people purchase flood insurance through the National Flood Insurance Program. These policies are administered by FEMA and sold by insurers such as Allstate and Farmers. A complete list of providers can be found on the NFIP website.
Depending on where you live, you may also be able to look into private flood insurers for better coverage or lower rates. A local insurance agent can help you find the best flood insurance for you.
Beyond insurance
If you can’t afford flood insurance or need other ways to reduce your risk, consider these tips.
Upgrade expensive items. Eby recommends putting expensive equipment like heating or air conditioning on raised platforms, which is generally cheaper than raising the entire house.
Protect your basement. Sealing the basement walls with a waterproofing compound can help keep floods out. Have a sump pump remove the water that has got in.
Install flood vents. These openings in your foundation can prevent structural damage by allowing water to flow freely in and out of the lowest level of your home.
Consider community solutions. There are limited things you can do to protect your home when the risk of flooding comes from outside your property. For this reason, Eby is encouraging homeowners to sit down with neighbors and local government to see whether investing in seawalls, dams or improved drainage systems could reduce flood risk more broadly. Finally, Eby says, “The property is only as valuable as the community to which it belongs.”
Sarah Schlichter writes for NerdWallet. Email: [email protected]
The article Why You Want Flood Insurance – Even If It Isn’t Required originally appeared on NerdWallet.
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