When Do You Need Flood Insurance?


1. You Live in a Flood Zone

A flood zone is an area that is known to frequently flood on a regular basis, and these zones have several classifications. Some of the main classifications include flood zone V, flood zone A, and flood zone X. Flood zone's V and A are at high risk because of their location near beaches and other bodies of water. If you live in a V or A flood zone, flood insurance is required.

Flood zone X has a lower risk of flooding because these zones are positioned farther inland. And while flood insurance may not be required, you may still want to consider if it's worth the investment to protect your home and property.

2. Your Home Faces Hurricanes

Homeowners insurance coverage may cover some hurricane damage, but it depends on where you live. For example, if a windstorm removes some of your roof's shingles, your homeowners insurance will likely cover it if wind damage is included in your policy. However, if you live in a hurricane zone, you may need special peril-specific insurance. Even then, most policies don't always cover water damages.

Naturally, flood insurance coverage doesn't include all water damage. For many policies, the water must come from outside the home as with a hurricane. Similarly, for flood insurance to kick in, at least one other home may need to have been affected, making this insurance option a perfect choice for hurricane zones.

3. Your Yard Struggles With Drainage

If you live in an area with heavy rainfall, and your yard has poor drainage, you may face a lot of complications. The longer the water stands outside your house, the higher the risk of damage to the foundation or flooding inside the basement or crawlspace.

In some cases, installing an inexpensive sump pump can help redirect water. But in other cases, to fix your drainage, you may need expensive repairs like changing the entire slope of your yard or installing an underground drainage system.

If you can't afford these changes, you are unable to make them, they haven't helped the drainage issue, or you simply want extra protection, then flood insurance is a great idea. Flood insurance often covers damage to things like the foundation, circuit breakers, and water heaters.

4. The Government Has Already Helped in the Past

After major disasters like devastating hurricanes, the federal government often provides disaster assistance, which can help you recover financially after your home and belongings have been destroyed. Of course, you can only get assistance if the federal government actually declares a disaster.

After you've received help, you may be required to purchase flood insurance and keep it as long as you live in the high-risk area. If you don't purchase flood insurance and another disaster destroys your home, you may not receive any federal disaster aid again. And in this situation, since you don't have flood insurance, you may end up financially devastated.

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