4 in 5 Americans Lack Flood Insurance Despite Acknowledging Its Importance

water damageFlood insurance is a necessity for most Americans as damage caused by water (as a result of hurricanes, flash floods, mudslides, etc.) can impact homeowners in any part of the country. What’s interesting is that a whopping four out of five homeowners realize that coverage for water damage is at the very least a great idea. But according to a poll for the Insurance Information Institution, only 13 percent of homeowners actually carry coverage.

Most Americans Know They Need Flood Insurance

Floods are among the most devastating natural disasters that can impact homeowners. In fact, according to the Federal Emergency Management Agency (FEMA) and its National Flood Insurance Program (NFIP), flooding is the United States’ number one natural hazard.

It seems that most homeowners are aware of the danger flooding can present. According to the study, in addition to recognizing their need for coverage, 51 percent even knew the correct flood-risk classification for their homes (low, moderate or high flood risks).

But despite this knowledge, only a small percentage chose to purchase coverage, likely because they feel that the cost of coverage is going to be far more expensive than it actually is.

Why Buying Insurance for Water Damage Is Crucial

One important reason that purchasing flood insurance is critical is due to the fact that standard homeowners insurance policies do not coverage water damage. The NFIP, which was created via FEMA, offers flood insurance through private insurers to pay for damage caused by water.

Individuals who live in high-risk flood zones are required to purchase flood insurance. But individuals living in other flood zones have the choice to purchase coverage, and most opt to turn it down.

For homeowners who list cost as the primary deterrent to purchasing coverage, it’s important to note that flood insurance premiums are not inherently expensive. In fact, a policy can cost as little as $500 per year for a medium-value home in Florida that is deemed low-risk.

The best way to find out how much a flood insurance policy will cost is to begin shopping around for quotes. It’s likely that in doing so you will find that protecting your home from water damage is far more affordable than you ever imagined.

(Image: Elspeth and Evan)