What your homeowners insurance provider forgot to tell you

Now that we’re in the process of recovery from Hurricane Florence, whether that’s waiting for the water to recede, cleaning up the yard and streets, or simply finishing the hurricane snacks, this is the time to think about your insurance.

“Most homeowners’ insurance policies only cover damage caused by threats such as fire, windstorms, hail, lightning, and theft or vandalism.Though there are other policies that cover additional risks,floods and earthquakes are usually discounted from general homeowners’policies. Therefore, a separate flood insurance policy is required to cover damage caused by flooding.” – North Carolina Flood Insurance

Most homeowners don’t realize that flood damage isn’t covered under their regular  policy, and if you’re not in a flood zone, you’re likely not required by your lender to carry this insurance on your home. However, as we’ve seen with Hurricane Flo, just because you aren’t in a flood zone doesn’t mean that you won’t find yourself praying that the water stays out during a weather event.

According to FEMA, just one inch of flood water can cost $27,000 or more in damage. So, as you look around at your Charlotte neighborhood, how many people do you think are in sudden financial distress because of the hurricane? But won’t government disaster assistance help? Unfortunately, disaster assistance doesn’t help in the way you might think. Disaster assistance is often in the form of low-interest loans for homeowners, not usually outright payments that cover the full loss of property and any damage sustained.

The National Flood Insurance Program, a program backed by the federal government, allows homeowners to cover the insurance gap in homeowners policies, with flood coverage maxing out at $250,000 for around $700 per year.

While the addition of flood insurance will increase my homeowners insurance costs by roughly 50%, after seeing the effects of Hurricane Florence… Maybe this is money well-spent to mitigate the risk of costly flood repairs should another tropical depression/tropical storm/category hurricane find its way to inland North Carolina.

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