Flood insurance is one of those mysterious things about home ownership that many people believe the wrong things about. The most common myths about flood insurance are often the ones that keep people from purchasing it and end up forcing them to pay, literally, in the end. Here are the most common myths that you should really learn the truth about so that you can understand what you should or should not do for your property.
Myth: My homeowner’s insurance is adequate.
This is one of the most common and most unfortunate myths surrounding flood and homeowner’s insurance. Your homeowner’s insurance covers a lot of things, but floods are not one of them. The only insurance that covers damage to the building and your personal belongings is the federally issued flood insurance that is sold as a separate policy from your homeowner’s insurance.
Myth: I do not live in a flood zone, so I do not need flood insurance.
This is a mistake many people make. They think because they do not live in an area where flood insurance is required that they are good. The truth of the matter is, though, that no matter where you live, you could benefit from this extra insurance. A flood can occur to any home, no matter the flood zone it is located in. The damages that the flood can cause can be in the tens of thousands of dollar range, where flood insurance would cost a mere fraction of that to cover your home.
Myth: A flood is a natural disaster, so I can get coverage from the federal government.
Yes, the federal government does provide aid in the face of a natural disaster, but not every flood is considered a natural disaster. In order for it to be declared as a natural disaster and provide the financial aid you would require, the President has to declare the disaster as such. The aid that is provided is not always cash in your pocket either; sometimes it is a loan and other times it is a fraction of the money you actually need in order to overcome the disaster.
Myth: Once there is a flood in your home, you cannot purchase flood insurance in the future.
If your home has been affected by a flood either when you owned it or prior to your ownership, you are more likely to get approved for flood insurance. All that is required is that your community participates in the National Flood Insurance Program. If that is the case, then you can qualify to purchase this insurance which provides the coverage you need.
Myth: If I buy flood insurance it will go into effect right away.
This myth could end up hurting you in the end if you decide until a flood is predicted for your area. Generally, there is a 30-day waiting period from the time you apply and pay for your flood insurance to the day that it becomes effective. In this case, it is best to be proactive rather than reactive.
Myth: I live in a condo, I don’t need flood insurance.
Even if you live in a condo, you should secure flood insurance if your area is at risk. Even though you will not need the insurance for the exterior or any part of the building, you have your personal belongings to consider. A flood could damage everything you own, causing you to start over from scratch, in which case, insurance would be extra helpful in getting you started.
Myth: No one else is affected by my decision to not purchase flood insurance.
The truth is that every taxpayer pays the price when people that should purchase flood insurance don’t when the federal government has to step in. People that do not have flood insurance need more assistance, which means taking more of the government’s money. In the end, the taxpayers suffer by paying higher taxes.
As you can see, there are many myths about flood insurance that really make people make the wrong decision regarding this type of insurance. If you want to be fully protected in your home, consider not only homeowner’s insurance, but flood insurance as well, regardless of the flood zone that your home resides.Click to See the Latest Mortgage Rates»