Understanding how flood insurance works is really important. First and foremost, unless you live in an area where floods are very casual, do not spend money for a flood insurance policy. It is something that is not necessary and will cost you a pretty penny over a long period of time. Also, flood insurance will not cover all costs that come with flood damage. Sure, insurance companies will pay a little bit but it will not cover things fully.
- Regular insurance does not provide for flood insurance but the government’s National Flood Insurance program can help although it is $350,000 maximum.
- On average, the claim for flood insurance is $39,000, negating the fears of many that flood insurance is the same as a total loss.
- If one lives in a flood plain, the mortgage company will require flood insurance but you don’t need to live there to be eligible.
“Whether your homeowners insurance will cover damage from a flood depends on the value of your home, the amount of water damage and whether you have a flood insurance policy. Here are six persistent myths about flood insurance — and the truths you need to know.”