Anyone considering flood insurance for monsoon season should act sooner than later because all flood policies have a thirty day waiting period before the policy begins.
You might be thinking that you don't need flood insurance because you don't live in a high flood risk area, but flooding can happen anywhere at any time.
In 2014, Phoenix had what was known as a "Once in One Thousand Year" rainfall which caused excessive flooding throughout the valley. The most flooding was seen in the cities of Anthem, Mesa, and Laveen, all of which are cities labeled as X, meaning that they have the lowest possible chance of flooding. In fact, more than 25% of all flood claims are from policy holders who don't live in flood zones.
Every household budget is a juggling act. Where you choose to spend your money depends on what’s most important to you. If you have a more pressing need and the skies are clear, you will likely join the many who skip flood insurance. For what it’s worth, people tend to associate floods with a total loss, but the average flood claim for U.S. homeowners is about $39,000, according to the flood insurance program.
While the conversation of whether flood insurance is right for you is one best had with your insurance broker, here are some things to consider:
Flood damage is expensive
Just 1 inch of water in a home can run up costs of $20,000, according to the National Flood Insurance Program. This could be a low estimate depending on the extent of replacing flooring and appliances, treating mold issues and addressing other problems.
The decision to carry flood insurance may not be yours to make
If you live in a higher risk flood plain, there’s a pretty good chance your mortgage lender will require you carry flood insurance on your house.
How much you’ll end up paying each year for an insurance program depends on where your house is located, its elevation and proximity to a floodplain, whether it has a basement, the age of the home, the roof and many other factors.
The average annual premium is $660. The average premium to insure a home that’s a moderate-to-low risk property is $420 annually. You can look up the risk of flooding for your address and get price quotes at FloodSmart.gov.
Just be aware that these policies carry a 30-day no-claims period (except policies that are required by your mortgage company, they have a 0 day wait) from the time you buy one until you can file a claim. So don’t wait until the storm is at your doorstep.
Flood insurance does not cover any temporary housing that might be necessary while your home is being repaired also.
AZ Insurance Team
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*