Flood insurance — don't get caught without it
November 15, 2021 — Homeowner insights | Insurance insights
Water: It makes up more than half of the human body, grows the food we eat and regulates temperature on earth. It’s the foundation of life. We need water, but it has the power to both nourish and destroy. More powerful than wind or fire, it can subtly wear away a rock, drop by drop. Devastating quantities can wipe out entire communities. In fact, 90% of natural disasters involve flooding.1
Striking a balance with this natural element is fundamental to our existence. We learn to swim so we can stay safe. We conserve water to protect our supply. We construct homes near it to enjoy the beauty — and if we’re informed, we protect them with insurance.
Most standard homeowners insurance policies don’t safeguard against water damage. It’s up to you and an insurance agent you trust to select endorsements to ensure that if the balance with Mother Nature is disturbed and water permeates your home, you can restore your greatest asset.
It’s tempting to think you don’t need extra protection, but Ashley Brady, a second-generation agent, will tell you, you do. Born into the business and raised in the office he now leads as national director of the Big I he’s seen how flood insurance impacts policyholders firsthand.
Fifty miles from the South Carolina coast in Marion at First Charter Company, Brady had been writing flood insurance for years before he ever saw the benefits firsthand. Then in October of 2016, Hurricane Matthew dropped 20 inches of rain in 24 hours causing the river to rise 17 feet — 8 feet above sea level — damaging nearly every home on the banks.
“I went from zero claims in my entire career to 50 claims overnight,” Brady said. Not only did Brady walk alongside his customers through this challenging time, he also experienced water damage in his second residence. “It’s devastating,” he said.
More than 20% of flood claims come from low to moderate risk areas where homeowners think they don’t need coverage. Even in high-risk flood areas, owners of homes without mortgages can decline flood insurance.
Brady had a customer who did just that — paid off the mortgage and canceled the flood insurance. After the storm, Brady had to remind him of his miscalculation.
“It was heartbreaking,” Brady said. “You’ve got a 60-year-old man standing in your office with tears running out his eyes saying, ‘Are you sure I don’t have flood insurance?’”
Fortunately, this individual had the means to rebuild his home. Others in the community are still struggling five years later.
Cooper Carter, of Pinckney-Carter Company in North Charleston, South Carolina, can tell a similar story, but with a better ending.
His customer initially declined flood insurance but, years later, refinanced. At that time, the mortgage company required flood coverage. Carter recalls his experience with her.
“She was furious to have to buy flood insurance,” he said. “I mean, she was spitting nickels mad because the rate was $800 a year.”
Two years later, her community experienced a massive flood, causing more than $200,000 of damage to her house. She later lamented to Carter, “I can’t believe I was balking at $800 and thought my house would never flood.”
“She swore her house was never going to flood, and she had one of the worst flood scenarios we’ve seen in our agency,” Carter said. “Her $800 premium covered everything.”
With a flood claim, it’s not just the water damage, mud is often part of the devastation.
Carter, who has also personally faced flooding in his office, believes it’s the worst claim you can experience. “Where we are, you don’t just get water, you get mud and muck. It’s not just flooding. It’s so nasty; it smells – it’s just the worst claim to me. It’s not something you can automatically replace; you have to repair everything.”
While these two stories tell of the devastation resulting from excessive amounts of water to cause flooding, water damage can result from any amount when it enters your home.
“It only takes a little bit of water to cause a lot of damage,” Brady said. “People just don’t understand it.”
Take it from these experts, insuring your home with flood coverage is the best method of protection. You never know when water’s powerful force will cause damage beyond your means.