Most people believe that flooding can’t affect their home – until it’s already happened. They also believe that they have no need for Flood Insurance. In the last 5 years, all 50 states have experienced at least some kind of flooding at some point. In some cases, the damage has reached to the Billions of dollars. The worse part of this is that most bypass Flood Insurance.
To help educate on what flood insurance actually covers we are going to go through 5 myths about Flood Insurance.
Myth 1: My homeowners’ insurance covers flood damage.
Fact: More than 80% of Homeowners do not carry flood insurance. Yet, a majority of
people believe that their homeowners’ policy will cover them if they have flood damage. Unfortunately, a standard homeowners’ insurance policy will not cover flood damage at a home.
Flood Insurance can start at just $112 per year with the average premium being $600 per year.
Myth 2: My home isn’t in a flood zone.
Fact: Everyone lives in a flood zone – some flood zones just have a higher risk of flooding than others.
High-risk areas are known as Special Flood Hazard Areas (SFHAs) and are marked on a Flood Map with a code that begins with an “A” or a “V.” High-risk areas carry a one in four chance of flooding during the life a 30-year mortgage.
Low to moderate risk zones, or Non-Special Flood Hazard Areas (NS
FHAs), are labeled with codes beginning with “B”, “C”, or “X”. These areas have a smaller chance of experiencing a flood than higher risk areas. Unfortunately, though, they submit a fifth of all NFIP claims. On top of that, they request a third of all federal disaster assistance for flooding.
Myth 3: A 100-year flood zone will only experience a flood once every 100 years.
Fact: The terms 25-year, 50-year, 100-year, 500-year, and 1,000-year flood refer to the probability that a flood will occur. So that means, a 25-year flood has a 4% chance of occurring, each year.
Two years ago, in Columbia, SC there was a .1% of a flood occurring. So, it could be another 1,000 years before another flood occurs or it could be next week.
As the U.S. Geological Survey points out, an area could flood more than once during a 100-year period or not at all, even if it’s a 100-year flood zone.
Myth 4: Flood Insurance is only necessary for high-risk areas.
Fact: Anyone has the ability to obtain Flood Insurance, regardless of a home’s level of risk. Just because there are high-risk and low-risk areas doesn’t mean that lower-risk areas can’t experience a catastrophic flood. An estimated 25% of flood insurance claims are for homes that aren’t in flood plains.
In the event of a disaster, paying a flood insurance premium can save homeowners a HUGE amount compared to taking out a loan to pay for disaster relief. EX, a $50,000 federal disaster assistance loan at 4% interest would be $240 a month, or $2,800 a year which would take 30 years to pay off. On the other hand, a $100,000 flood insurance premium can cost as little as $400 a year.
At the end of the day, reviewing your options with Flood Insurance can only benefit you. If you have any questions about Flood Insurance please give us a call at (803) 359-0026 or fill out a quote request below!
About David Watson
I was born and raised in Anderson, South Carolina, but I’ve lived in the Midlands for the past 7 years. My beautiful wife Katelyn and I have an adorable daughter, Blakely, who is our world.