What Everyone Should Know About Flood InsuranceInsured by Carver
Many people make incorrect assumptions about flood insurance and it could end up costing them when these assumptions prove to be false.When it comes to insurance policies–or really anything–there is no such thing as an "alternative fact." Your policy either covers it, or it doesn't. It's that simple. Unfortunately, few insurance policies cause as much confusion as flood insurance does. Where is the limit to homeowners insurance and where would flood insurance kick in? To avoid any further confusion on your part, here are a few things that everyone should know about flood insurance.
- Flood damage is not covered under homeowners insurance. Many people think that their homeowners insurance policy covers them for all damage done to their home. This is not true: flood damage is not covered. You need a separate flood insurance policy to cover damages caused by floods.
- Your lender will likely require it. Buying a home requires a lot of money. This is why many of us get a home loan to help pay for the house. Your bank needs assurance that it will get its money back, plus interest, and requires a homeowners insurance policy. But if your home is in a high-risk flood zone, your lender may require you purchase flood insurance.
- Price varies depending on your flood risk. There are low- to high-risk flood areas throughout the entire U.S. and a majority of homes are at risk of a flood. Flood insurance price varies on whether you live in one of these areas. Those in a high-risk zone pay more than those in a low-risk zone.