Flood Protection for Your Home

Since Hurricane Katrina, it's been harder to obtain flood insurance for your home. There are a few things you should know about flood home insurance in order to save money and make sure you're financially protected in the event of a flood.

5 Things You Didn't Know About Flood Insurance

1. Flood insurance, unlike regular homeowner's insurance, is not mandatory in most areas.
2. Flood insurance may not be included in your mortgage payments; you may have to write a separate check.
3. If you live in an area designated high-risk, flood insurance will be mandatory. You can run a quick Risk Profile at the National Flood Insurance Program website, located at www.floodsmart.gov.
4. Homes located in moderate-to-low risk areas experience 25% of all floods that result in insurance claims. Your regular homeowners insurance does not cover flood damage. That's why the National Flood Insurance Program recommends flood insurance on all homes.
5. Your lender may require flood insurance even if you're not in a high-risk area.

Some Sobering News about Flood Damage

The National Weather Service estimated damage from floods at more than $1 million in 2009. In 2005, flood damage estimates landed at $42 million, not counting damage from Hurricanes Katrina and Rita. It was too hard to isolate, the NWS website said, damage exclusively from flooding during these two hurricanes. Other statistics issued by the National Climatic Data Center place the monetary costs of damage from Hurricane Katrina between $100 and $150 billion.

How to Find Flood Insurance

As of 2008, the federal government no longer offers flood insurance. Like homeowners insurance, you can buy flood insurance from any insurance agency. Start with your own homeowners insurance company or agent to find the best deals. Insurance agencies often give discounts for bundled packages or umbrella policies that include your homeowners insurance, life insurance, car insurance and, yes, flood insurance.

Don't rely exclusively on your homeowners insurance agent, though. Shop around to compare prices. You may even find a better deal on your other insurance policies this way.

Save Money with These Flood Insurance Questions

In addition to asking about rates for "umbrella" insurance policies, ask these questions to get the best rates on flood insurance for your new home:

• What is my deductible? (You can save money with a higher deductible, but make sure you can cover the deductible with cash in the event of flood damage.)
• What exactly is covered? You might be surprised. Make sure you're fully protected in case of a flood from rain, snow, hurricanes, etc. Some home disasters resulting in water damage, including leaky roofs, washing machine leaks, and pipes bursting may be covered under your normal homeowners insurance policy. Sewage backup is not likely covered by either policy, unless it occurred as a result of a flood in the area; then flood insurance will cover it.
• Does my flood insurance policy cover my basement in the event of a flood?
• Do you offer any discounts for home improvements I've made to make my home more secure in the event of a flood? For instance, some insurance agents may give discounts for items like sump pumps, special roofing and good drainage systems.

How Much Flood Home Insurance Do You Need?

You can also save money on flood insurance by getting the right amount of coverage. Too much coverage means you're paying more than you need, while too little coverage can be extremely costly in the event of a flood.

To properly determine how much flood insurance you'll need, inventory the items in your home at their replacement value. Independent companies can provide home inventory services if you don't want to take on this time-consuming, detail-oriented task yourself.

When you purchase flood insurance, make sure to get "replacement value" for your items, and not "actual cost." If you don't get replacement value, you'll receive only a fraction of the money you need to replace your expensive furniture, home electronics equipment and more.