Flood Insurance

Three major myths about flood insurance mean you could be taking an unnecessary risk.

The first is that flood insurance is only needed for people living in designated flood zones. In reality, flooding is a potential risk everywhere and the damage can be devastating.

Another myth is that homeowners insurance automatically includes flood insurance. In reality, that is usually not the norm, and you should always assume you aren’t covered unless your homeowners policy specifically says otherwise. Insurance against flood must be obtained separately.

The third myth is that government programs have taken care of flood insurance. There is a National Flood Insurance Program that guarantees the availability of insurance in specific areas. However, this only covers a tiny percentage of American homes.

The Federal Emergency Management Agency’s (FEMA) maps are important when it comes to flood insurance because if they show that your home sits in a 100-year flood plain, you must buy federal flood insurance in order to get a mortgage. If you live outside a high-risk zone, or if you no longer have a mortgage, flood insurance is optional.