Flooding occurs in many parts of the country, which results in billions of dollars in property damage each year. Four of the top five costliest natural disasters in the U.S. were hurricanes according to CNN Money. The biggest natural disaster in U.S. history was Hurricane Katrina of 2005, which resulted in $160 billion in damages.
Standard property insurance policies usually cover damage caused by fire, wind, inclement weather, man-made hazards, and other events. Unfortunately, these policies do not cover damage caused by floods. Residential and commercial property owners need to purchase flood insurance to receive financial compensation for damages caused by a flood.
Flood insurance provides coverage for damage to property, buildings, and personal belongings as a result of flooding that results from a natural event. Most flood policies require a flood to cover a minimum of two acres on land that is normally considered dry before a policyholder is eligible to receive financial compensation. Flood damage that occurs from a sewage backup or water main break may be covered by other insurance you have on your property.
It doesn’t take much water to do damage to a structure. As little as one inch of floodwater can cause thousands of dollars in damage to a home or commercial building. Flooding is the most common natural disaster in America, and the average flood damage claim is $42,000. A flood policy isn’t required everywhere. Some lenders may require you to purchase a flood policy if they are buying a home in an area that is at high risk for flooding.
Only FEMA’s National Flood Insurance Program offers flood protection policies, and these policies can only be purchased through a licensed insurance agent. An agent will make sure a flood policy is appropriate for your situation, then shop and compare quotes for you to give you the best deal. If you are in an area that is prone to flooding, a flood policy can allow you to rest easy knowing that you are financially protected.