The Importance of Flood Insurance - Don't Find Yourself Underwater

The Importance of Flood Insurance -  Don't Find Yourself Underwater
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What is your biggest concern when it comes to your home? If you’re like most, protecting the hard work you have put into making your home a place your family and friends enjoy is at the top of your list.

You have the insurance necessary to restore your home and belongings in case of an unfortunate event, but is there anything that is not covered? 

Understanding your policy and what is included is key to making the most of the protection you invest in. Over the years, we have noticed a knowledge gap in the difference between homeowners or renters insurance and flood insurance which can lead to some very heartbreaking discussions down the road.

We are committed to providing you with all the information you need to make an educated decision about the protection you choose for your home and your family. So to better assist you, we have compiled a few common questions about flood insurance as well as a downloadable flood facts booklet with more information.

Am I required to have flood insurance?
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If you live in a high-risk flood area and have a government-backed loan, then you will be required to have flood insurance. In addition, lenders can require flood insurance on properties when they see fit. If flood maps change, as they do over time, then lenders also have the right to require homeowners to purchase flood insurance based on the new information.

​In the past, flood insurance was usually provided by the National Flood Insurance Program (NFIP). As of July 1, 2019, you can now choose private flood insurance over NFIP which can mean lower premiums and better coverage. ​

Do I really need flood insurance?

You could take the risk and not purchase flood insurance. You may never have an issue, and we hope that you don’t. We do, however, want you to know the risk you are taking before you make a final decision.  

Flooding can happen anywhere. No one is immune. The cost of repairs due to flooding can be nearly $30,000 for just one inch of water (2). Even if you live in a low or moderate flood risk area, you are five times more likely to experience flood damage than fire damage in the span of 30 years (2). 

Covering the cost of these damages can take a toll on a family and their future. Obtaining funding can be a stressful process as you assess the damages and usually requires a loan that will take several years to pay off. This is what we want you to avoid and exactly the reason that we decided to raise awareness about the importance of flood insurance.

Why does homeowners or renters insurance not cover flooding?
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Policies are optimized to provide the best value for clients based on differences in location, assets and historical data. Flood insurance comes separately so you have the freedom to choose what you feel best suits your family’s needs. 

It is important to note that one in five claims on flood insurance are filed by those living in low to moderate risk areas (2). Sadly, only about one in ten Americans have flood insurance (1). This means claims filed for flooding would likely be higher if more people chose flood insurance for their home. Imagine the financial burden and stress that could be avoided. 

Why choose private flood insurance over the National Flood Insurance Program (NFIP)?
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As mentioned before, until recently your options for flood insurance were limited based on government regulations, but now you have the right to choose private flood insurance over the NFIP. 

NFIP is more of a one-size-fits-most policy that has limited flexibility to meet the diverse needs of many Americans. The limitations of the NFIP policies can mean less coverage, higher out-of-pocket costs and possibly higher premiums. 

Some of the limitations of the NFIP include:
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• Temporary living expenses, not included
• Finished basements, not included
• Detached structures, not included
• Pool, not included
• Max building coverage, $250,000
• Max contents coverage, $100,000

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So, what do you do now?
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We truly hope this has helped answer some of your questions about private flood insurance, but we are sure you have more. 

While we might not be able to stop your home from become underwater, we can help make sure your finances don't suffer the same fate. 

Your time is valuable, and we want to make sure you make the most of it. For quick service please give the office a call, 417-863-1900, or send an email to customerservice@ioallc.com. 

Also, don’t forget the 7 Surprising Facts About Flooding booklet that outlines the differences between NFIP and Insurors of America flood insurance. 

If you are ready now, head over to our flood insurance quote form! 

We look forward to the opportunity to serve you! 

​References

 (1) Federation of American Scientists. (2019, May 7). Private Flood Insurance and the National. Retrieved from FAS: https://fas.org/sgp/crs/homesec/R45242.pdf 

(2) FEMA. (2019). Why Buy Flood Insurance. Retrieved from NFIP: https://www.floodsmart.gov/ 

(3) Insurance Information Institution. (n.d.). Facts and Statistics: Flood Insurance. Retrieved from III: https://www.iii.org/fact-statistic/facts-statistics-flood-insurance