Flood insurance is required if you are in a higher-risk (flood) zone. However, you can flood no matter where you’re located, as we learned firsthand.
The picture above shows the interior of our house after Hurricane Katrina. We lived in St. Bernard Parish at the time. The floodwaters were over 10′ deep, and our house was a single story, so it was a complete loss. Our furniture and belongings were virtually unrecognizable, looking as if they’d been thrown into a giant blender with mud, then scattered randomly around the house. Covering it all was a thick layer composed of fallen sheetrock from the ceiling and insulation from the attic.
Thankfully, we had evacuated about 2 days before the storm, taking our most valuable possessions with us. However, anything we couldn’t fit into our 2 cars remained, and suffered the fate you see here.
We were also grateful that we had a flood insurance policy in effect, with maximum coverage. When we’d bought the house in 2000, our wonderful insurance agent (who is STILL our insurance agent) informed us that it was located about 100′ inside flood zone C, which is a low risk (“no-flood”) zone. He told us how inexpensive flood insurance would be. Maximum flood coverage of $250,000 on the house, and $100,000 on the contents, would only cost us $317 a year. His advice saved us financially, as we chose to purchase that policy. It was still in place when disaster struck in 2005.
Even though almost 9 years have passed, that same policy only costs $414 annually today, an increase of less than $100. Remember, this is for a home located in a low risk (“no-flood”) zone, typically noted as zone B, C, or X. It’s a small price to pay for the peace of mind and the protection it provides. (Of course, flood insurance in higher risk zones does cost more. We will explain the differences in flood zones in part 2 of our series.) Click here to see the official rate chart.
I shudder to think of where we would be today if we had not had flood coverage. Even with that coverage, losing our house and everything in it was an experience we never want to go through again. That is one of the many great reasons we bought a house in Walker after the storm. We are now 65′ above sea level, and in flood zone X. However, we still carry maximum flood coverage, and happily pay that small premium when it comes due each year!
Unfortunately, many people did not receive the same great advice we did, advice which we always give to our clients. We learned about one family who bought a house in St. Bernard about 2 weeks before Katrina. (We did not know them at the time.) Their realtor and/or insurance agent and/or loan officer told them, “You’re in flood zone B! Why waste $200 a year for flood insurance you don’t need?” Soon afterwards, their house was utterly destroyed by the floodwaters from the hurricane.
Keep in mind though that it doesn’t take a hurricane to flood your house. A flood is considered rising water, no matter what the source is! If a pond overflows, or a water tank ruptures, or a reservoir breaks, and your house gets damaged by rising water, the damage will only be covered by flood insurance, NOT your homeowners policy.
Case in point: We were told of a lady who had built a nice, brand-new house somewhere in Mississippi. She was advised not to get flood insurance. Those giving her this (bad) advice said, “You’ll never flood here! It’s a no-flood zone! It has never flooded, so don’t worry about it!” Not long afterwards, another builder was clearing a lot down the street, and bulldozed the trees and mud into the ditch, blocking it. At some point later, a heavy summer thunderstorm sprang up, and her brand-new home was flooded to a depth of 18 inches! She lost all her furniture, had to rip out the bottom 3-4 feet of sheetrock and insulation, etc. The damage came to $40,000.00. When she tried to file a claim on her homeowners insurance, she learned that it did not apply, since this was caused by a flood. Since she lacked any flood insurance, her only recourse was to file suit against the builder. We do not know if she was successful, as that is a long and difficult process.
In summary, we believe that everyone should carry flood insurance on their home. Regardless of what the map says, or what zone you’re in, the fact is that your home can be flooded. If you live in a high-risk zone (A, AE, etc.) and have a mortgage, flood insurance is required by the lender. However, too many people, including realtors and loan officers, don’t stress the importance of flood insurance when you’re in a so-called “no-flood” zone. (According to Floodsmart.gov, the official site of the National Flood Insurance Program, people in these lower-risk areas file over 20% of claims and receive one-third of disaster assistance for flooding.) The cost of coverage is very low for such zones, and if you need it, as we did, the benefits can be lifesaving.
Flood insurance is crucial to home ownership, which is why we are devoting a multipart series of discussions about it. Next time, we will explain what the different flood zones mean, how they can change, and how they affect you.