And unfortunately, most homeowners in Sandy’s path did not have separate flood insurance, as explained in a recent Wall Street Journal story. Estimates are that only 1% of homes in New York City had flood coverage, 13% of homes in Westport, CT, and only 21% in hard-hit Moonachie, N.J.
Compare that with the 90% of homes covered in Ocean City, Maryland, or in low-lying states like Florida, where residents hold an estimated 2.1 million of the nation’s 5.6 million policies.
“Despite advertising campaigns by the federal program, many people aren’t aware they need the flood-coverage policies until it is too late,” reports the Wall Street Journal.
Since flood loss is not covered by homeowners policies, a separate flood insurance policy must be purchased to provide protection. Mark Rindom, Principal Agent with Wiglesworth – Rindom Insurance Agency in Delray Beach, Florida, says many people erroneously believe they don’t need flood insurance if they are not near a body of water. But the fact is that 25% of actual claims are on properties classified as low risk, reports Rindom. His agency has been a major writer of homeowners insurance in South Florida since 2004.
The good news, says Rindom, is that right now purchasing a flood policy in low risk areas can be as inexpensive as $407 a year for $250,000 of building coverage, while the average single claim payment is valued at $43,000. That makes flood insurance a bargain, compared to the value of the coverage it provides.
For further reading: “Check your insurance coverage as hurricane season arrives”