Do I Need Flood Insurance?

April 23, 2019

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If you’re a homeowner, you assume your home insurance policy covers flooding right? Wrong!!!  In fact, the majority of homeowner and renter’s insurance policies do not cover flood damage. You must add flood insurance separately through either the National Flood Insurance Program or a private insurer to be protected against flood damage.

Please be aware that there is a difference between water damage and flood damage. Water damage, for example, could be the result of a burst pipe that seeps water into the drywall on your ceiling. A variety of factors determine whether or not you are covered like whether the water damage resulted from poor maintenance (this is typically not covered). Consult with your insurance provider if you would like to determine the extent to which water damage is covered in your home insurance policy.

With that said, flood damage is a whole different ballgame. You may be thinking “I don’t live in an area prone to flooding, so I don’t need flood insurance” or “I’ve never experienced flooding so I must not need it.” Here are some stats that may sway you to believe otherwise:

1. According to FEMA, over 20% of flood claims come from properties that are considered to be outside of “high-risk flood zones.” 

2. According to American Rivers, the hanging climate means that floodplains are projected to grow by 40-50% over the next several decades and we have already seen a 20% increase in heavy downpours over the
        last 50 years. 

3. American Rivers also tells us that it is less expensive to prepare for a flood than it is to clean up afterwards. By taking steps to flood-proof your home, you may actually be providing $5 in benefits for every $1

Insurance providers, at a basic level, calculate insurance offerings and rates based on risk. Knowing this simple fact can give you serious insight into why most private insurers do not offer flood insurance. They don’t offer it because flood insurance is a high-risk business for them (i.e. they lose money instead of making it). Home damage caused by flooding is more likely to occur than other things such as fire, hail damage, or property theft (all of which are typically covered in a standard home insurance policy). The fact that many insurance providers do not offer flood insurance should be proof enough that flooding is a problem you should be prepared for. 

If you are still on the fence about whether or not to add flood insurance to your existing home insurance policy, try using FEMA’s interactive tool that estimates how much water damage could cost you based on the inches of flooding and size of home you have. Click here to try the tool. We tested the tool ourselves and discovered that in a 1,000 sq. ft one-story home, 1 inch of damage could cost up to $10,819 to repair. Without flood insurance, homeowners pay for repairs out of pocket or may even be forced to take out high interest loans to make the repairs.

Nobody can make the choice for you, but our industry experience and research on flooding promotes the choice to invest in flood insurance. Our product, DriBot, is also a great added tool for homeowners who want to avoid home flood and water damage altogether. In fact, many insurance providers will reduce rates to homeowners who adequately protect their homes against flooding and water damage using products like ours. Why? Because with the added protection, the home is at lower risk of damage. And remember, for insurance provider’s, it is all about the risk!

Find out if DriBot is a good investment for you by connecting with one of our experts!