Consider this: Only about 1% of Colorado homes have flood insurance. Homeowners didn’t think they needed it, because most residences fall outside a flood plain. Now think about the images you’ve seen the past week of flooding in the state.
Colorado emergency officials continue to tally the damage caused when more than 17 inches of rain fell on the state within less than a week. But they do know some numbers, and they are discouraging. At least 7,200 homes and businesses suffered damage in the two hardest-hit counties; some estimates say that nearly 18,000 homes in Colorado suffered damage.
What many residents have discovered upon returning is something many homeowners either didn’t know or had forgotten: Standard home insurance policies typically don’t cover flooding. Residents must buy separate flood insurance policies to be protected from incidents such as the Colorado disaster.
Sadly, many learned that lesson the same way many residents of the Northeast learned it last year during Superstorm Sandy. By living through it. It’s a terrible way to learn. Typically, most federal disaster aid only addresses short-term help with renting a place to live or possibly paying for minor repairs. Those without flood insurance might find help from low-interest government loans or relief organizations in the community.
Most homeowners don’t have to purchase flood coverage unless they have a mortgage backed by a federal agency and live in a 100-year flood plain. The last similar flooding in the region occurred in 1976, and many residents either didn’t remember it or know about it.
Rethink your need for flood coverage. The Federal Emergency Management Agency has always recommended it for all homeowners. It notes that more than 20% of National Flood Insurance Program claims come from areas that show up as moderate-to-low risk areas.
One thing to remember: It generally takes 30 days before a flood policy takes effect, so don’t think you can wait until there’s a threat to purchase coverage. Policies start at as little as $600, which isn’t much when you weigh it against the costs of rebuilding after a catastrophic event.
It’s easy to blow off the risk to you and your family, especially if you don’t live in a flood plain or near a large water source. But consider that flooding can occur for a variety of reasons and in a variety of locations. Make your decision carefully, weighing the risk thoughtfully before declining to buy.