Common myths about Flood Insurance
I have homeowner's insurance and don't live in a flood zone, so I don't need it.
In the summer of 2007, Kansas, Missouri and Oklahoma residents suffered terrible
flooding, and many were miles from the nearest river. "Flooding can happen anywhere. It has happened in every part of
this country in the past 12 months," says David Maurstad, of the Federal Emergency Management Agency, which runs the
National Flood Insurance Program (NFIP).
insurance policies do not cover flooding. A separate policy is needed and can be purchased from an insurance agent or directly
through NFIP, which administers the program. More than 20,300 communities nationwide participate in NFIP. So most, but not
all, homeowners qualify for flood insurance. Check the "Community Status Book" at fema.gov to find out whether your area participates. Then, go to floodsmart.gov and
click on "What's your flood risk?" to determine your odds.
Myth: Flood insurance is pricey.
Fact: It depends on if the dwelling is in a hazardous flood zone and if the dwelling is a primary residence
or secondary residence or rental.
Myth: Federal disaster assistance
will cover damage.
Fact: Don't count on it. "A
community must be declared a federal disaster area before it is eligible for disaster assistance," says Bob Rusbuldt,
of the Independent Insurance Agents & Brokers of America. "Federal disaster assistance declarations are awarded in
less than 50% of flooding incidents."
Myth: My lender
didn't require flood insurance, so I don't need it.
of flood insurance claims in a given year come from low- to moderate-risk areas," Maurstad says. Even in low-risk areas,
ice jams, melting snow and inadequate draining systems can wreak havoc.
Myth: Flood insurance will cover the entire house, including the
Fact: Comprehensive flood coverage should
include two policies: one for the structure and one for the contents of the home. Yet, most contents in the basement are not
covered. Basement contents coverage includes the washer and dryer, but it does not include finished walls, carpeting, floors,
furniture or personal belongings.