Texas Flood Insurance
I’m sure everyone is well aware of all of the rain which has led to many disastrous floods across the State of Texas. Did you know that floods are not typically covered in a homeowner’s policy? The U.S. Congress established the NFIP (National Flood Insurance Program) back in 1968 in order to help provide protection for property owners. Flood insurance covers many components of your house including: the actual house, the foundation, electrical and plumbing systems, a/c units, furnaces, water heaters, appliances, floors, blinds, and even detached garages. It also covers personal belongings such as: clothes, curtains, washers, dryers and food. Flood insurance is also very restrictive on basements (and other enclosed spaces below elevated buildings) as it only covers the heating and air conditioning systems but not any extras such as: personal belongings, carpeting, built in bookcases, etc.
So, how do you know if you should buy flood insurance? Location, location, location! Do you live on the coast where hurricanes are a possibility, or near a lake or river that can overflow? What about down in a valley where rushing waters could sweep your home away? Dams are great at helping control where all the excess water goes but what about if they break? Before buying any property you should be well aware of where the home sits geographically so you can determine the best coverage. Floodplains change over time and you do not have to live in a floodplain to purchase flood insurance. If you visit floodsmart.gov you are able to enter your address and evaluate the risk your property has of being flooded.
As an investor, you should really consider flood insurance to protect your assets. If you rent out or flip properties in risky flood areas, you don’t want to lose your investment. Also, renters can rest more easily knowing you have their personal belongings protected in the event of a flood as most renters insurances only cover water damage, not flood damage. Be smart and protect your investments.