It’s a question that is still looming in the minds of many Houstonians. Hurricane Harvey wrecked major havoc on Houston, and residents are still picking up the pieces of the storm, months after it passed.
The obvious answer, coming from an insurance agent, is: YES! You should ABSOLUTELY buy flood insurance! However, it’s important to have some context around how flood insurance works so that you can determine whether it’s a worthwhile investment for you.
For starters, it is important to note that flood insurance is NOT included as part of a homeowners, dwelling fire, or renters insurance policy nor can it be added to these policies. Flood insurance is also limited in what is actually covered - flood policies ONLY provide coverage for the dwelling itself and the contents inside the building. Unlike standard home and dwelling fire insurance, it does NOT provide loss of use or loss of rents coverage. This means, if your home, rental property, or even your business, is damaged from a flood, the policy will NOT pay for living arrangements while the property is being repaired nor will it pay for loss of rental or business income.
This may serve to deter some of you from purchasing flood insurance, but when it comes to something as disastrous as a flood, even having limited coverage is better than none at all, especially given the circumstances that so many Houstonians found themselves in after Harvey. Many of our clients called inquiring about the cost of flood insurance - and most were prudent enough to buy a flood policy right then and there - but some decided to wait until the next hurricane season rolls around.
There are two reasons why this is NOT a good idea. First, flood insurance has a 30-day waiting period,which means that it only goes into effect 30 days AFTER it is PURCHASED. Second, flood insurance is administered by the government through the National Flood Insurance Program (NFIP), which means that flood insurance rates are pre-determined and do not fluctuate unless the NFIP imposes a rate change. This past September, the NFIP issued a bulletin right after the hurricane season ended, indicating that rates on flood insurance will increase beginning April of THIS YEAR. Rates are expected to rise by as much as 18% or more for existing policyholders, and will be even more expensive for new purchasers who previously did not carry flood insurance.
There are several different factors to consider when purchasing flood insurance. While it has its limitations, a standard flood policy costs far less than your home or property insurance policy, and provides coverage for the most common peril that Houstonians have to face - flooding. Click here for more information on flood insurance, fill out a flood quote request form, or contact our office today and one of our staff will be more than happy to assist in obtaining a flood insurance quote for you.