The landscape of our entire world is forever changing. And with that change what we know about our environment and its tendencies are seemingly becoming more and more unpredictable. With fall right around the corner and our recent memories of extreme flooding in Boulder, Greeley and parts of the Denver metro area, flood insurance is becoming more of hot topic. Do I need it or not? While for some homeowner’s it is mandatory the rest of us are left with the dicey decision of whether or not to invest in a policy. Below are a few things to consider when deciding if flood insurance policy is right for you.
Everyone Lives in a Flood Zone
It’s just a matter of how much risk of flood there is. The National Flood Insurance Program, NFIP, has a one step flood risk profile that estimates your risk and the annual cost of flood insurance, while FEMA can give you a flood map for your location. When looking at these maps, zones A and V are high risk areas while B, C, and X represent moderate to low risk areas. These zones are used to help determine policy rates.
More Than 25% of Flood Insurance Claims Come From Moderate-to-Low Zones
That’s 1 out of 4. And that’s not counting homeowners who weren’t insured and, therefore, couldn’t file claims. The number of uninsured homes is an unknown statistic. However, only 18% of homeowners nationwide have flood insurance. Contrary to popular belief, your homeowner’s insurance will not cover flood damage, even if you’re in a moderate to low zone and are not required to have flood insurance.
Don’t Count on Government Aid
Government aid comes largely in the form of loans, which you have to repay. In addition, before you can even qualify for a loan your area has to be declared a federal disaster area, and federal disaster assistance is declared in less than half of all flooding events.
Below are a statistics from RMIIA.org that affected Colorado in 2013;
Although 23,078 households in Colorado have applied for disaster assistance with FEMA (as of Oct. 6, 2013), most flood victims do not have insurance coverage for this type of loss. FEMA data show that roughly 6,200 home and business owners in Boulder and Larimer Counties have flood insurance policies (Boulder – 4,877 policies and Larimer – 1,322 policies). El Paso County has the second largest number of policies (3,698). Throughout the state, there are only about 22,000 flood insurance policies in force, or about 1 percent of the total number of households.
The Average Flood Claim is over $30,000
Inches of water can easily cost you tens of thousands of dollars in damage. Between 2006 and 2010, the average flood claim was nearly $34,000. That’s more than most consumers can pay out of pocket for damages due to flooding, and without flood insurance, many must cover the costs to repair or rebuild on their own. Consider your risk and the consequences of a flood event, and make a calculated choice to protect yourself.
Cost & Waiting Period
The annual premium for flood insurance for a single-family dwelling averages about $400-$450 nationwide, but can fluctuate depending on the coverage level you select. If you are interesting in pursuing a policy be aware of the waiting period. All flood insurance policies require a 30-day waiting period before the coverage is effective, except for new home closings.
About the Author: RICHARD MUCCIACCIO
Richard works for Colorado Insurance, a local family owned and operated independent insurance agency in Littleton that represents over 13, “A” Rated insurance carriers. His passion to help his clients understand their insurance needs are unmatched. Richard’s motto is “do whatever it takes” to ensure his customers are engaged, educated and satisfied with the results.