Reevaluating Flood Insurance

| January 08, 2013

For many property owners, flood insurance seems optional or unnecessary. The mortgage company doesn’t require it, the house is paid off, the property isn’t in a flood zone – these are a few common justifications for not carrying flood insurance. Unfortunately, many property owners using these justifications are also finding themselves literally underwater. The frequency and severity of storms and weather patterns is changing, particularly with regard to hurricanes. Hurricane Sandy perhaps highlights this best with an estimated $20 to $30 billion in uninsured flood losses (Wall Street Journal). Given our recent flood related experiences, we believe it is time for all property owners to reconsider flood insurance.

Flood insurance covers the insured building, foundation, electrical systems, plumbing, appliances, heating and air, personal belongings, household items, and debris removal, just to name a few. It is important to note that flood damage is NOT covered by your homeowners policy. 

Flood Facts:

-Flood policies start at $129 per year, but average $600 per year.
-The average flood insurance claim is $30,000.
-25% of claims filed within the National Flood Program occur within moderate-to-low risk areas.
-Flood insurance takes effect 30 days after purchase, so it is important to buy before the threat of a storm or high waters.
-Floods are the most costly natural disasters in the United States.

-Over the course of a 30 year mortgage, there is a 26% chance the property will be damaged by flooding.

In the aftermath ofSandy, we encourage you to recalculate your risks. Start by having a conversation with an agent to discuss your options. Get a flood insurance quote, and weigh the costs of a policy against your aversion to risk. Always remember that Clarke & Sampson is here for you, from guidance and servicing to claims management. Contact Jan Aller or Scott Jefferson today at 703-683-6601.