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What is Homeowners Insurance and What Will Be Covered?

By Compuquotes Team on October 16th, 2009

Homeowners Insurance

Your Homeowners Insurance May not Cover Flood Damage. Be Sure You are Insured as Damage Can Be Very Costly.

Your Homeowners Insurance Policy May Not Cover Flood Damage

You may think that your homeowners insurance policy automatically provides coverage for flood damage. This may not be the case, making it very important that you find out as soon as possible.

Are You Insured?

Most mortgage lenders, who want to protect their investment in your home, require you to have this insurance if you live in a flood zone. However, if your house is paid up, you might have dropped this type of coverage, or perhaps you never had flood insurance as you are not in a designated flood zone.

How Bad Can Flood Damage Be?

Flooding can severely damage your property. Even a foot of water can ruin your carpets and furniture, stain your walls, and damage your heating and cooling systems. And once the water has receded your house may be infested by mold and mildew.

If a severe flood hits, at best you may not be able to live in your house until a thorough cleanup is completed. At worst, the house may have to be extensively rebuilt or even razed if its foundation has been affected. Not only will you have to pay to have your house repaired and your property replaced, but you will need to pay to live somewhere else while the damage is being fixed.

More Problems if You Work at Home

Flood damage is compounded if you work from home, as you may not have a place to either live or work. Along with having to pay to work somewhere else, your electronics, such as the computer equipment upon which you depend for your living, may be destroyed by water.

Mud Slides Are Also Floods

Floods and mud slides would seem to be very different, unrelated perils, but your insurance company may consider mud slides a form of flooding and exclude coverage for them. Your house could be buried in mud or even washed off its foundations and you won't have any coverage.

Your Mortgage Payments Must Still Be Met

In a flood you could lose your entire home, which represents the biggest source of equity for most people, as well as a life time of memories. Of course, if you have a mortgage, your lender will still expect the monthly payments to be made, even if your property no longer is standing. Flood insurance coverage pays you so that you can pay your lender.

Check Your Insurance Policy

Review your policy, especially the fine print. Be sure you understand what it says. Call your company if you're not sure of something. Unless flood coverage is specifically stated, there's a good chance you aren't covered. Also, pay attention to those mailings you receive about changes to your policy. Ignore one of those letters and your flood coverage may have been altered without you realizing it.

Federal Flood Insurance

If you don't have flood insurance and you can't add it to your policy, the federal government has a program for you. Go online at www.FloodSmart.gov for more information about how you can qualify for the federal flood insurance.

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