Is It Okay to Skip Flood Insurance?

For more than 50 years, the National Flood Insurance Program (NFIP), under the administration of FEMA (Federal Emergency Management Agency), has been working hard to reduce losses suffered due to flooding by home and business owners in the US. It does this by providing affordable flood insurance, by educating the public about the risks flooding poses and by encouraging communities to not only adopt but to enforce flood plain management regulations.

Who Needs Flood Insurance?

No home is completely risk-free from experiencing flood damage. According to FEMA, floods are the most common natural disaster in the country and flood damage is almost never covered in your standard homeowner's insurance policy. Furthermore, FEMA says that 98% of all counties in the U.S. have experienced flooding at one time or another. It's simple – if it rains where you live, you're at some risk of experiencing flooding.

This means you don't have to live in a coastal area or next to a river to be in danger of flooding. While it's true that homes located in low-risk flood zones are less likely to be affected by flooding, it's important to understand that “low risk” doesn't mean “no risk”.

Flood insurance is like other types of insurance in that you don't really want it until you need it, but if you wait until you need it to get it, you've waited too long! You should also be advised that, when you get federally-backed flood coverage through the NFIP, there's a 30-day waiting period before that coverage activates.

Skipping Flood Insurance

If you've been living without flood insurance, perhaps you're now thinking it may not be worth the risk. If you live in a high-risk flood zone you're probably already covered, since your mortgage company likely requires it. But consider this: more than 20% of the homes and businesses affected by flooding are in the low- or moderate-risk flood zones, and as little as one inch of flood water in your home or business can cause as much as $25,000 worth of damage. Insurance that costs just a couple or a few hundred dollars annually to maintain is well worth the protection you receive against these losses. We've seen a rash of floods all over the country in the past few years and, if history is an indicator, flooding incidents just look to be getting worse.