Flood Myth: Not in my neighborhood
There are many myths about flood insurance, and the biggest myth is thinking you don’t need it. With a tropical weather system stalled over parts of Florida this week, the ensuing deluge should get you thinking about why you need this important protection.
A standard homeowners insurance policy does not cover flood insurance, and that’s been true for more than four decades. If you live in an area at high risk for flooding, the mortgage lender requires flood insurance. If you live in a low-risk flood zone, the lender does not require it. But that does not mean you don’t need it. Would you be motivated to consider flood insurance if you knew that nearly 25 percent of flood insurance claims are paid to people living in low- to moderate-risk flood zones? Well, now you know.
As of September 2015, there were 1.8 million flood policies in force in Florida. Yet, there are more than 3.1 million single family homes in our state. Many of those Florida flood policies are bought by people living in coastal condos. Do you need flood insurance if you live on the 9th floor of a high rise on the Gulf? Yeah, you do. Because if storm surge beats up the bottom floors of the condo making it uninhabitable, you won’t be able to retrieve your personal possessions as the building is likely to be unstable/condemned. Flood insurance would cover that loss.
Flood insurance statistics show about 68 percent of policies nationally cover single family homes, 21 percent cover condominiums, and 5 percent cover businesses and other non-residential properties. Two- to four-family units and other residential policies accounted for the remainder.
Earlier this summer, there was flooding in parts of Tampa Bay. The National Flood Insurance Program reported just 38 claims. That is not an indication of the minimal amount of flood damage; it is an indication of how few people have flood insurance.