Sunday, November 30, 2008

Check your flood insurance

Consumer (US): It's time to reexamine your risk for flood damage and the need for flood insurance. With a warmer planet facing more incidents of larger storms, this winter could be a wet one that opens the floodgates, especially in the West North Central U.S. where precipitation levels are already above normal.

Flood insurance is only mandated for properties in high-risk flood zones, but even if you live in a low- or moderate-risk area, you should bone up on the National Flood Insurance Program (NFIP). That's because floods are the most common natural disaster in the U.S. If you live in a flood plain, your home has a 26 percent chance (more than one in four) of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance (less than one in ten) for fire damage.

To help get you started, here's a quick primer on floods and flood insurance to help you determine if you need the coverage when it's not mandated:

…• If you aren't required to have flood insurance and choose not to buy it, it's a good idea to have as much as $20,000 socked away for self-insurance. For just one inch of water in your home, expect an estimated $8,000 in damages, according to the NFIP's "Cost of Flooding" estimator. A foot of water -12 inches -- will cost you nearly $19,000.

• Your regular homeowners insurance policy typically does not provide benefits for losses caused by a flood, yet the NFIP says one in four flood insurance claims come from areas with low-to-moderate flood risk. That means too few homeowners carry the coverage.

…Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed flood control structures and tropical storms and hurricanes. Even if you have a hillside home and you think you are above harm's way, there's a risk of mudslide or debris flow. Both are covered by flood insurance….

Isaak Ilich Levitan, "Spring Flood," scanned by Fanghong, Wikimedia Commons

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