Home insurance flood coverage, is it worth the money
Finding out what you need in and what you don’t or as we phrased it in the title, what it worth your money and what isn’t is no easy task. This is especially so in an industry like home insurance where you are betting against the odds of something terrible happening to your house. You then have the weigh the odds of that happening, the cost of fixing it and the expense of paying for the insurance.
This is especially important with risks that are not covered by typical multi-peril insurance packages, flood insurance being one of them. You can’t contract every home insurance coverage out there or you could buy a new house just with the yearly insurance fee. So some smart choices are needed to assess your risk and protect your investment.
This article will focus on the pros and cons of a rather important home insurance coverage, flood insurance. Floods can completely destroy your home, it’s contents and make it unlivable for long periods of time. As we mentioned above it is not included in most home insurance packages so you have to make the choice of including it in your home insurance coverage or not.
The Good.
The good thing about having flood insurance is that you have protection against one of the nastiest things that can happen to your home. When Mitch hit the Caribbean, Central America and surrounding areas the damages were often absolute, homes and contents completely destroyed. There are few more distressing things than having everything you own destroyed in a minute and not have the cash to replace it. My wife suffered that experience when living in the Dominican Republic and lost everything she had, unfortunately she had no flood insurance.
The bad.
Flood insurance is very expensive. For a business for example that is worth under 500,000 dollars it will probably mean $3,000 per month, for larger business it can easily climb to $7,000. This is why most individuals and business waive flood insurance coverage unless they feel their house or business being flooded is a real risk.
The ugly.
Many people that don’t get flood insurance because they feel they aren’t at risk suffer the dire consequences of flooding. The saying a house built on a hill doesn’t get flooded is not so adequate in our current global warming climate where more and more previously safe areas are being affected. To illustrate this 25% of flood victims live in an area that was not categorized as a flood prone area.
The best thing you can do if you are re-assessing your home insurance and are thinking about flood insurance is to contact your insurance agent and get some advice from him. Then take the coverage he suggests you get (they are very prone to encourage you to spend more) and see if you can get a better home insurance deal elsewhere.