If flood insurance is required by a lender during the purchase of a property, that question is often answered for you. However, what if it isn’t required in a manner like that? You then must make that decision on your own, because flood damage is not covered by homeowners insurance. Things to consider are as follows:
What constitutes a “flood?”
- Rule of thumb: – if water comes “down” into your home, damage is typically covered by your homeowners policy. For example, if your pipes break or your roof leaks, the water would trickle down and cause damage. If water comes “up” into the home through the ground, basement walls, or sewer or drain systems, it is not covered by your homeowners policy.
- Water that backs up through drains can be covered if you add specific coverage for it on your homeowners policy.
- Water that comes in from the ground in any way other than a drain back-up is considered a flood. There is no coverage for this on your homeowners policy, so a separate flood insurance policy must be purchased.
Am I in danger of flood?
- Do you live near water that can rise rapidly in heavy rains or during spring thaw?
- Do you experience significant run-off during those same times?
- Have you ever had water in your basement/home in previous years?
Is this a “unique” year for potential flood concerns?
- Have we had significant snow during the winter that will affect Spring thaw?
- Are you concerned about weather patterns that indicate an unusually wet season?
If I do experience water in my basement/home is it potentially enough to cause damage to the home?
- Is there property (building or contents) subject to damage that can’t be moved higher or out of the way altogether?
- Will water rise to a level that could impact equipment in that space (i.e. furnace, water heater, freezer, outlets, etc.)
- Is the potential loss more than you could afford to repair or lose (building and contents)?
If the answer to any of the last three questions is “yes,” you should consider buying flood insurance.
So, how much is this going to cost? Premium is largely based on location, as determined by the National Flood Insurance Program. If you are in a higher-risk area, you will generally pay a higher, although not unaffordable, premium. You will also have greater peace of mind. If you are in a lower-risk area, it’s still worth buying because no one ever thinks their home will be flooded until it happens.
Finally, the greatest factor for buying flood insurance is time. Flood insurance requires a 30-day waiting period for coverage to start after a policy is issued (except when it is lender-required). So, when should you be getting quotes for insurance? The answer is NOW! As we all know, winter weather is unpredictable. Patterns of heavy snow and thawing can make water appear out of seemingly nowhere. Spring weather will determine if there are issues or not, but by then it will be too late.
For flood conditions and regular updates regarding flood activities, follow the Aroostook Emergency Management Agency’s flood watch page on Facebook – “Aroostook County Flood Watch”
For more information about flood insurance, check out this video: