What is flood insurance?
Unless you live in a flood zone, you may never have thought about flood insurance.
Most people don’t realize that flooding is covered by a totally separate policy than their traditional homeowner’s policy. In fact, in many cases, damage from water coming from outside the home is not covered at all by a standard homeowner’s policy.
That’s where flood insurance comes in. The National Flood Insurance Program is a federal program managed the FEMA and administered by a hand-picked network of insurance companies.
Why get flood insurance?
On one hand, you might legally have to. If your home or business is located in what’s been designated as a high-risk flood area, and your mortgage comes from a government-backed lender, then you are required to carry flood insurance.
In other cases, you may simply want to protect yourself. Just because you’re not in a high-risk zone doesn’t mean that you’re safe from flooding, and considering the fact that just one inch of floodwater can cause up to $25,000 in damage (according to FEMA), it pays to be prepared.