It pays to guard against flood damage

Too many homeowners risk financial disaster

It’s hard to forget last year’s hurricane season and the lessons we all should have learned from it.

One of the chief lessons for homeowners and renters: Consider getting flood insurance.

Here are two facts I bet you didn’t know: Floods occur in all 50 states. And, most homeowners insurance does not cover flood damage.

Here’s another fact: Timing is important. Flood insurance requires a 30-day waiting period to take effect.

Only about half of homeowners living in some of the most flood-prone areas of the United States buy federal flood insurance, leaving millions of families at risk for severe financial losses when floods strike, according to a study released this year by the Rand Corp., a nonprofit research organization.

One of the reasons many people don’t buy flood insurance is simple: They don’t think they need it, said Lloyd Dixon, senior economist at Rand.

“If people don’t see water, their risk perception is lower,” Dixon said.

If you don’t live in an area with a high risk of flooding, your premium could be as low as $112 a year, which would cover about $20,000 in building damage and $8,000 in contents.

If you want more protection, you can expect to pay about $317 a year for $250,000 worth of building coverage and $100,000 in content coverage. That’s about $26 a month.

For information, go to www.floodsmart.gov.