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Historic Floods Prove Importance Of Flood Insurance

Flooded vintage interior. 3d concept

South Carolina, North Carolina, and Virginia flooding has made headline news for the past week. Videos of college kids tubing through normally dry tunnels, people being rescued by helicopters from their homes, and footage of overturned cars and homes deep in water have flooded the media. With feet of water, failing dams, and catastrophic damage to homes not even in typical flood zones, this historic flooding has begged the question: should everyone buy flood insurance?

While the answer may seem obvious, research indicates a lack of interest in flood insurance—even after storms like this shake up lives and have the potential to impact most people in America. Here are all the facts so you can make an informed decision about whether or not flood insurance is worth it to you.

Half of Americans are vulnerable to hurricanes and subsequent flooding.

The Insurance Information Institute, or III, reports that 49% of the U.S. population can be impacted by hurricanes. Almost half of all states—19 plus Washington D.C.—are also at risk of the effects of a storm surge.

The fact of the matter is, all 50 states have experienced floods or flash floods in the last five years. While 95% of homeowners have home insurance, those policies don’t cover flooding. And more than 20% of flood claims are filed by those who don’t live in flood-prone areas.

People don’t think flood insurance is important.

Despite that high number of potentially affected homes, only 19% of Americans think they are at risk of flooding due to a hurricane or storm. Half of all those people aren’t worried about storms damaging their homes or cars either. According to the Insurance Information Institute (III), just 14% of people in the U.S. have flood insurance and that number isn’t rising even with an increasing rate of natural disasters.

Flood claims have added up to billions.

From 2003 to 2012, total flood insurance claims averaged nearly $4 billion per year. In South Carolina alone, the projected damages have already overflowed into the $1 billion mark for the 1,000 year flooding.

Flood insurance averages about $700 per year. However, premiums can cost homeowners $10,000 if they’re in high risk areas. Since damages could add up to $33,700 for a 1,000-square-foot house and double for a 2,000 square foot home, even the priciest flood insurance would pay for itself three-fold if you needed it.

Where You’re Most And Least At Risk

Over the past 60 years, Texas has had the highest number of Federal Disaster Declarations. On the other side of the scale, Wyoming and Rhode Island have had the fewest. As far as the highest risk zones for flooding, hurricanes, and fires, Florida, Rhode Island, Louisiana, California, Massachusetts come in on top. While Michigan and West Virginia have lowest risk followed by New York, North Dakota and Vermont.

Moral of the story?

While it’s never good to constantly worry about the unstoppable or catastrophic, it is smart to prepare yourself for the worst. In light of the fact that natural disasters are increasing and flood insurance policy purchases are not, you might want to think twice about that. You never know if and when a flood could impact you.

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