According to FEMA (Federal Emergency Management Agency) “floods are the most common hazards in the US.” That is why FEMA periodically evaluates the entire territory of the US for the level of flood risk that people face in individual areas. Flood risk maps have last been updated about 25 years ago; they are currently being evaluated by FEMA and are expected to be published next year.
Homeowners who live in the areas with high flood risk are obliged to purchase flood insurance. However, even the population of moderate- to low-risk flood areas should consider purchasing insurance (which is optional to them) since 25% of all flood claims occur in those areas. Therefore, flood insurance is critical to almost every homeowner since the basic homeowners insurance does not cover flood damages while “just a few inches of water can lead to thousands of dollars in damages.”
The rates for the flood insurance are established by FEMA. In general, the premiums range between $200 and $1,600 per year. David Schein, senior flood insurance liaison official for the FEMA region based in Chicago, also adds that purchasing the flood insurance now, i.e. before FEMA updates the maps and rates, can result in substantial savings. For example, if based on the previous evaluation you were in a moderate-risk area and paid $300 per year, after with the new maps the area you live in could be regarded as high-risk, and so you would have to be paying $1,300 per year. To conclude, if you are a homeowner you should check the rates before the new maps come into effect.
Sources:
http://wearecentralpa.com/content/fulltext/?cid=136641
http://www.lakeexpo.com/articles/2009/11/30/top_news/05.txt
http://www.battlecreekenquirer.com/article/20091205/NEWS01/912050311/Preliminary-flood-maps-finished
http://www.chicagotribune.com/features/chi-restate-home-policy_1206dec06,0,3320764.story
I do not think that a flood insurance is worth it. We have plenty of expenses to pay for, many of them are insurance related. Now that we already lost an arm and a leg for all of that, I don't think we should sacrifice an eye for another expense. We take risk in everyday life, I think we can make it without the flood insurance.
ReplyDeleteQuang Nguyen
I didn't know that floods are the most common hazards in the US. If so, maybe people should pay more attention to more high risk and high probability hazards like these and buy insurance for these things. It is very important to analyze one's area to see what insurance is needed. Although I agree with Quang that not everything can be insured, since this is such a probable hazard, it is hard to ignore. - Jonathan Tse
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