One person says flood insurance is a waste of money, while someone else says it is a wise investment. So how do you decide for yourself? What should you consider? We asked experts and real-life flood insurance customers to get honest opinions. Here is what they had to say.

Adam Beaty

Adam Beaty

CERTIFIED FINANCIAL PLANNER™ at Bullogic Wealth Management

I felt especially close to this one because I live in Houston/Pearland and have recently gone through the experience of Harvey. Unfortunately, Harvey touched a lot of lives in Houston that never expected it. If you live in a flood-prone area you will be required to keep flood insurance.

If, however, you do not live in a flood-prone area we highly recommend purchasing flood insurance. For these areas, flood insurance is incredibly cheap. For $400-600 a year, you can easily transfer the risk of a flood to the insurance company. Flood damage is not a fender bender. Water is getting into your house and your car, you are either totaling your car or doing serious remodel work to your house. To be able to transfer that risk at such a low cost is a great return on investment and an easy decision.

These 100-year storms are not a thing of myth anymore, we are starting to see these big storms every couple of years. Just because someone has survived a big flood in the past, doesn’t mean they will in the future. The landscape, environment, and situation are completely different from each of these storms. That is why flood maps are constantly changing. Surviving one doesn’t mean surviving the next one.

I probably wrote to much information for your article, this topic just hits so close to home. We constantly advise clients to pick up flood insurance in and around the Houston area. We’ve been told by clients that they were fine in Harvey so they don’t need to spend the little money required to buy flood insurance. This is something we work on changing in their mindset.

Flood insurance is not an investment but rather a crucial part of any company’s or person’s insurance plan. Most general insurance policies and Homeowner’s policies DO NOT cover flood damage. Even if a property is not in a designated flood zone it is still at great risk for flooding. Many properties that were recently flooded from Hurricanes and Storms were not in designated flood zones.

A flood can be financially devastating for companies and individuals. Federal assistance is usually only available in the form of a loan that must be repaid. Flood insurance claims are paid out even if the government does not formally declare it as a disaster and does not need to be repaid.

Joseph Deutsch

Joseph Deutsch

My name is Joseph Deutsch-owner of Fidella Insurance Agency, a Commercial Insurance Agency.

Tanya O'Coyne

Tanya O'Coyne

Tanya O’Coyne, President of TSC Restoration, Inc., a water damage restoration company in San Diego (https://tscrestoration.com).

If you live anywhere where flooding is a real possibility, flood insurance is a great investment. It’s an average of $700 for a one-year premium to cover up to $250,000 in damage to your home and up to $100,000 for loss of property. Flood damage can be extremely labor-intensive to clean up, since it takes so much more decontamination than typical water damage, so it can be challenging to pay for those costs out of pocket. $60/month for coverage is a small price to pay for that peace of mind.

When compared to other types of property insurance, flood insurance — mostly underwritten by the United States government — is extremely inexpensive and provides adequate coverage for most homeowners.

Approximately one in every five flood claims occurs in areas that are not considered to be flood prone. So even if you live in an area that is not listed as a flood zone, there is still a significant chance that your property will be damaged or destroyed by flood during the time that you reside there. Purchasing flood insurance is one of the best decisions you can make.

Mr. Stacey A. Giulianti, Esq.

Mr. Stacey A. Giulianti, Esq.

Stacey is the author of the instructional manual, Florida Insurance Law (Thomson West). He has 30 years experience focusing on insurance law. He received his JD, with honors, from the University of Miami.

Erica

Organic Moments Photography Team

Flood insurance is always a good idea. The more insurance the better is my motto. I live in South Florida and own a wedding photography company. You never know what weather could be heading our way.

Based on personal experience, I’d say yes, if there is any potential for having your home flooded. I live out in the country. However, rain came down so fast during IRMA that the drainage could not handle it. Road in front of my house was 14 inches under water. My house is lowest in neighborhood, and was flooded. Because the water came in through the door, it was considered rising water, and at least in Florida, it water comes in from the ground, even if it originated from the sky and didn’t drain fast enough, homeowners does not cover. While flood insurance doesn’t cover all the damage, it definitely helped.

Ilene Davis

Adrian Mak

I’m Adrian Mak, with AdvisorSmith. We’re a business insurance advisor, and we have written a comprehensive guide about commercial flood insurance:
https://advisorsmith.com/commercial-flood-insurance

Depends upon the location and nature of the business or home. For businesses or homes located in areas likely to flood, having flood insurance can be an important investment in protecting your home or business in the event of a flood.

Since flood insurance is subsidized by the government through the National Flood Insurance Program (NFIP), homeowners and business owners in flood zones actually receive a subsidy on their flood insurance coverage. Since flood insurance is generally excluded from property insurance that you buy from a private insurance company, the NFIP is usually the only provider of flood insurance for flood zones.

When I took a teaching job in the Tidewater Area of Virginia, my wife and I bought a house in Hampton, roughly two miles ‘as the crow flies’ from the Chesapeake Bay (and 7-tenths of a mile from the Back River which empties into the bay). And when I was transferring my homeowner’s insurance to my new address, I asked my agent whether I needed flood insurance.

Since my neighborhood sat on the highest ground in the area (and my home was 14 feet above sea level), my agent said that we weren’t eligible for subsidized Federal Flood Insurance given the government’s regulations that were then in force. He also told me that he had quite a few clients who lived in my area, and that none of them carried flood insurance. He further said that getting private flood insurance was possible, but that it would be very expensive. So I only opted for ‘standard’ homeowner’s insurance.

While hurricanes came ashore once or twice each season in the Outer Banks (whose northern tip was about sixty miles southeast of Hampton), by the time those storms got into Hampton Roads, they were usually just ‘tropical storms’ with wind-speeds in the 45 to 60 MPH range (coupled with plenty of rain, of course). So there was often a fair amount of damage to roofing shingles and tall trees — which always meant quite a bit of clean-up work.. And falling trees regularly knocked out the electricity for a few hours. But after a couple of days of clean-up work and some minor inconveniences, life was back to normal for 95% of the folks living in my area. And preparing for hurricane season became a pretty routine chore.

Then came Hurricane Isabel in 2003! When it reached Hampton, it was a pretty nasty tropical storm. And it was moving very slowly, stalled when it reached the Chesapeake Bay, and strengthened to a Category One Hurricane as it sucked warm water from the Bay. The eye of that storm passed directly over my house, the rainfall was almost unbelievable, and that rain was being driven by 75 MPH winds.

The storm surge flowed into the Back River (dramatically overflowing its banks), all of the storm drains in my neighborhood began backing up, and heavy rains just continued to fall. My house was on a court, and the entire street was quickly under more than a foot of water. And as the heavy rain continued, the water just kept rising as the storm surge from the Chesapeake Bay further flooded into the Back River!

Soon, 70% of my sloping front yard was under water. Then my lawn was 80% submerged — and then 90%. Luckily, the rain stopped and the flood-waters never got closer than six feet from my home’s concrete slab foundation.

Many of my friends who’s homes were closer to sea level had significant damage to their homes and cars. A few of them had been eligible for the Federal Flood Insurance Program and had bought policies — but many more had not.

I was without electricity for 10 full days, and cleaning up the mess in my yard took more than a week of hard, daily work. But fortunately, the damage to my house and detached garage was minimal. A few years later the Feds redrew their flood maps, and my neighborhood became eligible for subsidized Federal Flood Insurance. (Better late than never, I suppose!) As soon as I completed my doctorate, I took a new job well inland. I’d dealt with hurricanes for 15 years, and I’d had enough!

So is flood insurance necessary? If folks live in an area where flooding is a possibility, the short answer is, “Yes!”

Timothy G. Wiedman

Associate Prof. of Management & Human Resources (Retired) Doane University.

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