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Cowart Insurance Agency Blog

All You Ever Wanted to Know About Insurance

It’s Time to Rethink Flood Insurance

Floods are the nation’s most common disaster, and also the costliest, according to the Federal Emergency Management Agency (FEMA). Each year, U.S. homeowners suffer billions of dollars in flood-related damages.

Unfortunately, many people’s homes are unprotected from flood damage. Is yours among them?

If you think you do not need flood insurance because you do not live in the 100-year flood plain, consider this:

A common misconception is floods happen only in the mapped 100-year flood zone. Nearly 80% of the flood losses from Hurricane Harvey in Houston were outside the 100-year flood plain. The average loss was over $130,000.

Flood maps do not indicate flood risk greater than the 100-year event; they may be outdated and do not indicate all sources of flooding. Also, Mother Nature cannot read a flood map. This means your potential for flooding may be much greater than it appears on the map.

If you think your current property coverage will cover your flood loss, consider this:

Unfortunately, most homeowners policies will not pay for damage due to flooding. While some companies provide coverage for events such as sewer backups, payment for damage from rising flood waters requires a separate policy or endorsement for coverage.

If you think the federal government will help you, consider the following:

FEMA grants are not the same as insurance. They are not intended to “make you whole.” They are usually not enough to get a household back to how it was before the disaster. The average FEMA disaster grant is only about $5,000.

Most federal assistance is in the form of a Small Business Administration loan; a loan you must pay back with interest.

Also, federal disaster assistance is available only for presidentially declared disasters. That means the local storm that flooded just your home and a few others in your neighborhood will not qualify, and no federal assistance will be available.

If you think flood insurance is too expensive and that you could afford the average flood loss, consider this:

The average flood loss for the year ending May 2018 was just under $35,000. Could you absorb that without assistance? Flood insurance can be the difference between recovering and being financially devastated.

For more information on obtaining a flood insurance policy, contact our office.