5 Most Common Flood Insurance Mistakes

According to Statista, the country experienced 130 significant floods between 2010 and 2019. In 2017, the total loss due to flash floods was around $60 million, making it the most financially excruciating year for Americans.

When such disasters strike, everyone suffers — whether they are families, individuals, or business owners. As reported by Reuters, floods and other water-related disasters could cost the entire world $5.6 trillion by 2050. These natural disruptions are being caused by the changing environment. Of course, sustainability initiatives are being supported; however, it is still a long road ahead.

The best way to stay afloat in such circumstances is to protect yourself socially, financially, and mentally. And one of the best ways to do it is by signing up for enough insurance coverage to live peacefully through the season.

To that end, here are the most common flood insurance mistakes you should avoid.

1. Being Underinsured or Uninsured

The worst and most common mistake people make when it comes to flood insurance is not knowing that it exists. Most homeowners purchase standard property insurance and believe that everything is covered. Disasters are mostly not covered by general property insurance. 

To put it mildly, this leaves the individual underinsured or uninsured in most circumstances. Flood insurance must be purchased in addition to existing insurance policies for those who live in flood-prone areas. Otherwise, any flood-associated damage wouldn’t be paid for by your general insurance policies.

2. Last-Minute Hassle

Individuals who live in flood-prone states such as California and Florida must never wait until the last minute to implement appropriate policies. Insurance policies must be purchased well in advance to avoid last-minute complications. As soon as summer begins, individuals must start by looking for and understanding the proper policies for their families and property.

3. Improper Valuation

Another mistake people make when purchasing flood insurance is failing to seek outside assistance for proper valuation. Most people are not financially literate to understand what type of insurance policy they require and what should the ideal valuation and premiums be. 

To avoid being underinsured, get a proper valuation done and take recommended flood insurance policies with appropriate coverage based on location, past claims history, and risk factors. For example, a property right next to a body of water may necessitate more coverage at a higher premium. 

4. Depending Exclusively On Federal Help

The US government provides aid and assistance to flood-affected families, and homeowners can apply for up to $200,000 in repair work and assistance. However, these claims can take a long time to be approved, and the extent of damage cannot always be covered by federal assistance alone. 

When your home or small business is damaged, you need immediate assistance, and insurance policies can be your best bet because they even cover temporary housing costs until the repair work is completed.

5. Renewal, Limitations, and More

Insurance policies have limitations and renewal requirements that most people overlook or fail to notice. To avoid being in financial trouble when a crisis strikes, it is critical to review all your insurance policies and apply for renewals if any of them are about to expire before or during the summer season.

How To Avoid These Mistakes?

Reading the Fine Lines

When it comes to insurance policies, no one enjoys reading the fine print. Individuals frequently blindly trust their instincts in previous policies they have taken, never realizing that these policies may need to be re-evaluated to meet current needs. 

Many homeowner policies exclude coverage for natural disasters such as flooding. As a result, it is critical to seek expert advice to understand your previous policies and implement changes as needed to stay safe during the flood season.

Taking Proper Insurance

In order to avoid any of the aforementioned errors, it is critical to obtain the appropriate insurance. Even if you have flood insurance, you can obtain policies such as umbrella insurance. This is to assist you in obtaining protection from unforeseen circumstances in which someone else is injured on or near your property or because of your family member. 

Other insurance coverage options for protecting yourself, your family, and your property during the summer include liability coverage and valuables insurance.

Summing Up

It is critical to keep an eye on what changes your policies require. To ensure that you are properly insured, you should have your policies and coverage thoroughly reviewed by an insurance provider. They can get to the bottom of the problem and recommend any missing coverage and point out underinsurance issues in your portfolio. 

Gonzalez Insurance specializes in risk-mitigation strategies. During flood season, we have assisted small businesses and individuals in protecting themselves and their assets. If you need a regular summer policy checkup or want to renew any of your policies, contact us for a thorough portfolio analysis.