When it comes to protecting your home with insurance, make sure you understand that this takes a multi-level approach. Consequently, homeowners insurance companies offer base, or regular, polices as well as additional coverage components like flood insurance. If you are looking to purchase this coverage, make sure you know what mistakes you should avoid in order to protect your home and your investment.
Incorrectly Classifying Damage
Make sure you understand that all water damage is not classified the same. Falling for this myth will leave you vulnerable and without the right coverage in the event of an incident. Take a home that has its roof stripped off during a storm, causing rainwater to flood the inside, for example. In this case, a standard homeowner's policy will likely cover the cost of the roof and flood damage.
However, if the same home suffers a flood that was caused due to a backed up sump pump, this damage classification would only be covered under a homeowner's flood insurance policy. Don't listen to anyone that tells you a standard policy will cover all water damage.
Coverage Is Only Important For Flood Zones
Flood insurance isn't just important for those who live in high-risk flood areas. High risk zones are associated with houses in areas that experience heavy rainfall or that are near large bodies of water.
The reality is that a flood can occur outside these hot zones. In fact, a common cause of home floods is plumbing issues, such as clogged toilets or a malfunctioning drain. Don't fall for the idea that you only need to purchase flood insurance if you live in a high risk area.
A Federal Policy Is Sufficient
Don't listen to someone who tells you that you only need a federal flood insurance plan. While these policies are great to have, it's not always a great idea to rely on them solely. The primary reason for why has to do with coverage limits. For the average family home, your government backed plan will only cover up to $250,000 worth of damage.
If your home is valued as a total loss and it was worth $300,000, that's $50,000 in out-of-pocket costs you will be left to come up with. If you are using one of these plans, make sure you purchase extra coverage from a private carrier.
In order to ensure that your home is fully protected with homeowner's flood insurance, it's best to speak with an agent. An agent will be able to take into account any water risks, the value of your home and any additional factors in order to pair you with the right coverage.
Share22 December 2015
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