Five facts everyone should know about flood insurance
October 1st, 2007 - Categories: Basics of Dothan Real Estate, Buying a home in the Dothan area
By: Judy Spears
Excerpts From USAWeekend
1) Homeowners insurance does not cover flooding.
Homeowners insurance typically covers losses associated with wind, lightning, burglary, vandalism, etc. Flooding is a specific damage and is not lumped into other categories, so under no circumstances is flooding covered under your homeowners policy. The only way to get flood insurance coverage is through the National Flood Insurance Program administered by FEMA.
2) Do not depend on Federal Disaster Assistance
“A community must be declared a federal disaster area before it is eligible for disaster assistance,” says Bob Rusbuldt, of the Independent Insurance Agents & Brokers of America. “Federal disaster assistance declarations are awarded in less than 50% of flooding incidents.” If the flooding is very localized to just a few houses, which is usually the case, then a disaster declaration is likely not going to happen.
3) Flooding doesn’t stop at the line on the map
One third of all flood claims come from moderate to low risk areas and heavy rains can occur anywhere and any time. And don’t think that because of our ongoing drought that it can’t happen in Dothan right now. Flooding can and does occur where you least expect it.
4)Flood Insurance prices depends on location of property.
There are a couple of different “zones” for determining the risk for flooding, and therefore the amount of flood insurance premium. The nationwide average for flood insurance coverage is less than $500 annually. That’s often less than the interest on a federal disaster loan, plus you don’t have to repay the money. Your lender will typically require flood insurance if your home is in one of the risk areas.
5)Flood insurance is structured in 2 parts.
Comprehensive flood coverage should include two policies: one for the structure and one for the contents of the home. Make sure you get coverage for a basement if you have one.
I learned about the risks of not having flood insurance first hand. Back in 1995, the Dothan area received about ten inches of rain in a three hour period. The ground was very dry at the time, but it still couldn’t absorb that much water in that short of a time span. About six inches of water entered my home on the south side of Dothan, in a location that is not considered a flood prone area. It was depressing to watch my shoes float through our living room.
Being as close as we are to the gulf coast, the rainfall from tropical systems is always a threat during summer and fall. It is better to spend a few dollars each month on flood insurance than risk what could be thousands of dollars on replacement and repairs.