While the vast majority of homeowners have home insurance, the Insurance Information Institute reports that only around one out of seven possess flood coverage. Let’s take a look at how these two types of policies compare in terms of cost, benefits and necessity:
Home insurance usually compensates people for losses associated with burglaries, fires and some kinds of severe weather. It may cover water damage inflicted by sudden plumbing leaks or ruptured pipes. However, it generally excludes natural floods. The same goes for earthquakes, nuclear power accidents and a few other exceptions.
On the other hand, flood insurance typically covers damage directly related to natural flooding. You should consider purchasing one of these policies if you live near an ocean, lake, river or stream. A flood insurer may approve claims for sewer backup damage but will only do so when flooding triggers the backup.
Home insurance covers a greater variety of losses, so it often costs more. Premiums vary depending on numerous factors, but you might spend about $500 to $700 more per year than you’d pay for a flood policy. Some people purchase both flood and home coverage while very few Americans only buy flood policies for their dwellings.
Mortgage lenders normally require homeowners to possess home coverage until they pay off their loans. Banks only expect borrowers to pay for flood policies if they live in locations that face a considerable risk of flooding. Regardless of whether or not a lender requires insurance, it’s always wise to protect your investment with adequate coverage.
If you’re looking for an affordable flood or home policy that thoroughly covers your house and belongings, we can help. A friendly, knowledgeable agent will evaluate your specific needs and recommend a suitable plan. Please contact our office today for a quote.