If you don’t own a home on a flood plain, you probably haven’t thought about adding flood insurance to your home. The fact is, you should. Flooding is the number one natural disaster that affects homes - even more than fire – and most homeowner's policies don’t have flood insurance built in. While large-scale flooding does occur due to sustained heavy rains, rivers that overflow their banks, and even hurricanes, these aren’t the major sources. Flooding usually occurs in the home due to things like localized heavy rain over a short period of time or snow melt. These types of events cause the local sewer system to become over-burdened and result in backups that cause extensive ground saturation. This, in turn, causes damage to home foundations and allows water to leak into basement areas.
In the event that a large-scale natural disaster causes the flooding, you might get federal disaster assistance to cover the flood damage, but it is only available if the President declares a disaster. Keep in mind, more than 90% of all disasters are not declared by the President. So it is best to have yourself covered by adding flood insurance to your home instead of relying on the government to bail you out.
Flood insurance will cover almost every major system in your house, including all of the plumbing, electrical, structural components, and floor coverings. It will also cover all of your items that are kept on the main floor and above, provided you have a belongings clause in your policy. What some homeowners fail to realize is that there are items that are excluded from flood coverage that need to be individually insured with a rider. In a finished basement, any floor coverings, cabinetry, refrigerators and freezers or major furniture pieces will not be covered.
If you live in a low-risk area, you may qualify for a preferred price plan that could cost as little as $100-$200 annually. On the flip side, if you live in a high-risk area, you may be required to carry flood insurance. In either case, having flood insurance is a good security measure as it can save you tens of thousands of dollars if a flood does hit your home.