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Five general reasons for buying flood insurance

Flood Insurance is often an insurance which is not bought or even considered because of a few misconceptions and lack of awareness attached to it. The five reasons for considering the option of buying flood insurance are as follows:

Reason # 1 –  Flood Damages can be caused Anywhere.

One often heard argument against buying flood insurance is that it is not required in areas, which are low flood prone or that floods do not cause damages everywhere. However, nothing is farther from the truth. Floods have the inherent ability to travel quickly and can in one sweep cause long lasting damages in places at an elevated level or at those places which have not been affected by flood before.

Reason # 2 – House: The Most Expensive Asset

Most people spend a sizable chunk of their earnings and savings in buying and owning a house. While a house is definitely an asset, a flood can cause damages repairing, which would be very expensive. Further, if the house has been bought on a loan and hasn’t been repaid yet, then the financial burden on the owner increases. Buying flood insurance would take care of the costs involving the repair works.

Reason # 3 – Federal Support Not Always Possible

Flood relief will be provided by the Federal Government only if the President of The United States declares a particular flood as a national disaster, which is not always the case. Only in the case of a national disaster, all the costs involved in repairing the damages caused by the flood are taken care of by the Government else the financial expenses have to be borne by the owner.

Reason # 4 – Home Insurance Does not cover Natural Calamities

The normal home insurance taken by most of the house owners does not cover natural calamities like landslides, floods, avalanches, earthquakes and tsunamis. A rider policy has to be taken along with the regular policy in order to cover disasters caused by the nature. Generally, the rider clause is never discussed by insurance companies as the buyer never asks for it.

Reason # 5 – Flood Insurance covers more than just Structural Damages

A flood insurance not just covers the structural damages caused by the floods but also covers loss of individual property due to flood. The list of personal property is the one which is excluded by the dwelling property like furniture, furniture, household equipments, electronic devices, etc.

Overall, it can be said that buying flood insurance is a prudent decision and a low premium to pay for a lifetime asset like a house..