Three Reasons Flood Insurance is Essential Beyond Flood Zones

Posted by DIMONT on November 6, 2018 at 12:28 PM

Mortgage lenders and homeowners nationwide know the importance of purchasing various types of insurance for the home. Flood insurance, however, is a coverage often overlooked by those who feel water isn’t a threat to their location. We saw how devastating lack of flood insurance can be with Hurricane Harvey, and we’ve seen it again in the aftermath of Hurricane Florence, which highlighted the fact that only about one in 10 homes affected by Florence had flood insurance. According to a report from the Washington Post, the areas with the worst Florence-inflicted destruction had the least amount of flood insurance.

The scenario of underinsured homes post-disaster is, unfortunately, a familiar one. If the property in question is nowhere near a body of water or in an area that rarely sees rain, it can be hard to convince the property owner to consider adding flood insurance to their coverage. We’re on a mission to help mortgage lenders encourage property owners everywhere to always add flood insurance to their homes. See below for the top three reasons flood insurance is crucial for all property owners, regardless of being within or outside of a flood zone:

  1. Extreme Storms are Becoming More Common

The National Hurricane Center’s data indicates that the number of storms in the U.S. has been steadily increasing since 1914. In just the last decade we’ve experienced three Category 5 hurricanes, which are not only the rarest type of hurricane, they’re also the most severe. After what the nation endured with 2017 and 2018’s storms—which were not all Category 5 storms—it’s safe to assume storms will continue to worsen over time. The more flood insurance policies are put in place to protect homes, the better chance of maximum financial recovery in the aftermath.

  1. Even a Small Amount of Flood Damage Means Expensive Repairs

Perhaps the property in question is technically not in a flood zone but still experienced minor flood damage after a storm. On paper this doesn’t sound too detrimental, but the reality is that just one inch of water in the home equals approximately $26,000 in damages—a statistic not only backed by FEMA, but harrowing enough to inspire us to get flood insurance on the minds of mortgage lenders and property owners everywhere. Most people don’t have the funds to handle a $500.00 emergency, so to face a setback as large as flood damage would likely be financially devastating to the majority of the nation’s homeowners.

  1. Flood Zoning Laws Can Change Any Time

Water damage can happen anywhere. Because of this, the laws of flood zones are frequently subject to change. FEMA’s National Flood Insurance Program (NFIP) has official maps used to establish flood zones, which get updated twice a year. Homeowners and mortgage lenders can even submit a Letter of Map Change (LOMC) request to FEMA if they feel their area is regularly affected by storm damage. If your property currently isn’t in a flood zone, keep in mind that this could always change. It’s better to be safe and purchase flood insurance than to leave the fate of your property to unpredictable storms and water damage.