How Much Is Flood Insurance and Is It Worth It?

flooded living room with couch and chair under waterFloods aren’t as visible as fires from afar, but they can cause the same devastation to your home without the hype. In fact, 1 inch of water can easily cause over $25,000 in damages.

So, is flood insurance necessary? Is it worth whatever the cost is? Let’s talk about that.

How Much Is Flood Insurance?

Okay, before we get started, let’s talk about numbers. To put it simply, the average cost of flood insurance in the US is between $800 and $1,200 a year. That’s not bad considering the possibility of avoiding a $100,000 or more expense in the event of a flood, right?

Well, keep in mind that we said that’s the average. The cost of insurance will vary widely, and you won’t know your own premiums until you get an offer from an insurance provider. However, keep that range of $800 to $1,200 in mind while we go through some factors that will determine your own cost.

Flood Risk

If you’re at the top of a hill and completely inland, you’re at a much lower risk of flooding than someone living off the coast. This will be factored into your premium.

Remember, just because you’re at a low risk doesn’t mean you shouldn’t get flood insurance. Almost any house can flood and cause destruction. Not having coverage could be a disaster. The good news is that it’s a lot more affordable if you’re at low risk!

Age of Home

An older home is more likely to take extreme damage from a flood than a newer home, especially structural damage. Replacing drywall is relatively inexpensive, but replacing the entire structure of a home is not.

This will be factored into your risk, as it is more likely to be an expensive fix. If you have an older home, there are probably more ways for water to get in, fewer ways to get it out, and more ways for serious damage to take place.

Value of Home

Of course, if your home is worth $5 million, and it’s on the beach, your flood insurance will cost more than a small ranch house in Nevada. Some insurance providers offer a uniform maximum payout of $150,000. This is obviously not enough if your house will cost half a million dollars to repair.

Make sure that you take into account what your home is worth and what the worst-case scenario would be in the event of a flood before accepting a maximum coverage.

Limit of Coverage

Part of the cost will be determined by how much you want to be covered. While some of these plans are pretty uniform in coverage and deductibles, you will have to choose which plan to go with, which will determine what is covered in the event of the flood and how much you will have to pay out of pocket.

If you live in a high-risk area, you may want to spend a little extra to get full coverage. If you’re in an area that hasn’t flooded in 100 years, you might as well make sure you’re fully covered, since it will only cost you a few extra dollars every month.

Be sure to do your homework on this. Getting the wrong amount of coverage is one of the most common insurance mistakes that a consumer can make, and it can come back to haunt you in the future!

What Does It Cover?

Flood insurance covers your basic essentials, but it does leave a few things out. Again, it depends on the type of plan you buy, but these are some of the most common items covered.

The House

Coverage on most plans will typically include the foundation, structure, and anything that is permanently attached to the house. That could mean central air systems, electrical systems, heating equipment, permanent carpeting, and even some common appliances. Many plans will offer up to $150,000 in damages while the rest will fall on the homeowner.

Personal Items

These are not always covered by your plans, so make sure that if you want your personal belongings covered, you review your flood insurance plan before signing it. These items will include clothing, furniture, electronics, and more. They will add up to a pretty penny in the event of a flood if left uncovered.

Remember, you will have to opt in when it comes to covering personal items. They are not guaranteed coverage. If you have a lot of valuable belongings in your home that floods could damage, speak to your insurance provider about coverage options.

What Isn’t Covered

Things that aren’t covered are most often the items outside of your house. What’s the most expensive thing you keep outside of your home? Probably your vehicles and yard equipment. If you want these covered, you will either need to speak to your flood insurance provider or car insurance provider to make sure they have flood protection.

If there is anything that you keep outside your home, like in a separate garage or shed, speak to your insurance provider about coverage to see if arrangements can be made.

Is It Worth It?

Now that we’ve answered the question: “how much is flood insurance?”, it’s up to you to decide if it’s right for you. If you’re in a high risk area, you could have a devastating bill ahead of you without a flood insurance plan. If you’re in a low-risk area, you have little to lose by buying a plan because costs are low. Reach out for a quote and perhaps it’ll help with your decision.