3 Reasons to Buy Flood Insurance ASAP

Floods aren't usually what comes to mind first when thinking about the worst natural disasters, but underestimating them is dangerous. They're the most common natural disaster in the world, and the average home has a 26% chance of suffering flood damage in 30 years compared to just a 9% risk of fire damage.

Many think their homeowners insurance has them covered, but the truth is a real gut punch to the wallet. To be truly protected, separate flood insurance is a must. Here are three reasons why.

1. Floods are some of the most common -- and expensive -- natural disasters

Floods are some of the most expensive natural disasters. Just one inch of water in a 2,500-square-foot, two-story home causes an estimated $72,162 in damages, according to the Federal Emergency Management Agency (FEMA). Four feet of water in a home can amount to six figures in damages.

2. Traditional homeowners insurance doesn't cover flood damage

It's largely due to these high costs that homeowners insurance companies stopped covering flood damages. Paying out too many of these claims could compromise the company's financial security, leaving them unable to pay for other covered disasters.

3. Some mortgage lenders require it

Mortgage lenders in areas at high risk for flooding may require their homeowners to have a flood insurance policy to get approved. This protects their investment so they don't lose a bunch of money if a flood damages the property.

How to buy flood insurance

Flood insurance is available through the National Flood Insurance Program (NFIP). This isn't the sort of policy homeowners can buy online, though. They'll have to talk to an insurance agent who can help them get the coverage they need. Cost varies significantly depending on the home's location. Low-lying and coastal areas typically pay much more than inland homes on higher ground.

The average flood insurance policy costs $1,808 per year, and there are deductibles as well. It can be tough for some homeowners to squeeze into their budgets, but it's still much more affordable than paying for flood damages out of pocket.

A flood insurance policy includes up to $250,000 of coverage for the home itself, including the foundation, electrical and plumbing systems, and finishings. It also includes $100,000 to cover personal belongings damaged by flood waters.

Those interested in purchasing a flood insurance policy shouldn't wait to do so. There's typically a 30-day waiting period before the policy goes into effect. Spring is just around the corner and that brings a lot of snowmelt and rainstorms that could easily spill over into flooding. Set aside a few minutes to investigate flood insurance policies now to spare yourself some major potential stress later.