Water Water Everywhere

Flood Insurance seems to confuse a lot of people. The biggest area of confusion is whether or not someone needs it. Hopefully I can clear up that issue right now. Almost everyone needs flood insurance.
When you consider that 30% of all flood claims occur in areas that are considered “low risk”, and that over the term of a 30 year mortgage you have a 26% chance of being damaged by flood compared to a 9% chance of being damaged by fire, well I think you get the picture.

What is the insurance definition of a flood? It is “a general and temporary condition of partial or complete inundation of two or more acres of normally dry land or two or more properties (at least one of which you own) from: Overflow of inland or tidal waters, Unusual and rapid accumulation or runoff of surface waters from any source, Mudflow, Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding  anticipated cyclical levels that result in a flood.”

As you can see, that definition covers a lot of territory.

It is important to know that just because you have not had a flood in the past does not mean that you won’t at sometime in the future. Flood risk is not based exclusively on history. It is also based on a number of other things such as rainfall, topography, flood control measures and development. These things change so it is always a good idea to consult the most recent flood zoning map in your location.

One way to make sure that you really do need flood insurance is to work with an independent insurance agent. The agent can help you purchase the policy that is right for you and may even be able to combine it with other policies so you can take advantage of discounts that can save you money. Most importantly, the agent can help you to understand how flood insurance works.

One final item that is very important to understand is that your flood insurance policy will not become effective until 30 days after purchase. So don’t wait until the waters rise before you buy it.

For more information go to www.pennyinsuranceagency.com.
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