Should You Buy Flood Insurance?

Article From HouseLogic.com

By: Dona DeZube
Published: June 19, 2013

If you have a mortgage (http://www.houselogic.com/home-taxes-financing/home-loans-mortgages/) on your home and you live in a high-risk flood zone, in most cases, your lender requires you to buy flood insurance.

However, if you live in a moderate- to low-risk zone, and your community belongs to the National Flood Insurance Program (most do), then you have the option of buying it.

If you're in the latter category, your first question probably is, "How much does it cost?" Federal flood insurance can cost just a few hundred dollars or as much as $10,000 a year, depending on your risk factor.

Some other facts that can help you make up your mind:

Your Homeowners Insurance Doesn't Cover Flood Damage

It only covers water falling from the sky. Once water touches the ground and enters your home, it's a flood (http://www.houselogic.com/protect-your-home/floods/), and only flood insurance will pay for the damage.

For example, if a tree limb pokes a hole in your roof during a rainstorm, and rainwater damages your ceiling and floor, that's covered by your homeowners insurance. But if heavy rain causes the creek in your neighborhood to overflow into your home, that's covered only by flood insurance.

To be more precise, the National Flood Insurance Program uses this definition of a flood:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow.

Everyone Lives in a Flood Zone

It's just a matter of how much risk of flood there is. The NFIP can tell you your home's exact risk of flooding. But in a nutshell, zones A and V are high risk areas. Moderate- to low-risk areas are zones B, C, and X. If you're in zone D, the risk isn't clearly known because it hasn't been mapped yet. But you still can purchase flood insurance. The zones are used to help determine policy rates.

More Than 20% of Flood Insurance Claims Come From Moderate-to-Low Zones

That's 1 out of 5. And that's not counting homeowners who weren't insured and, therefore, couldn't file claims. No one knows how many uninsured there are, although only 18% of homeowners have flood insurance.

You Can't Count on Government Aid

Government aid comes largely in the form of loans, which you will have to repay. Before you can even qualify for a loan, your area has to be declared a federal disaster area, and federal disaster assistance is declared in less than half of all flooding events.

The Average Flood Claim is $30,000

But if you live where the water rises so high that emergency responders have to cut roof holes to rescue people, your potential flood loss could be quite a bit higher.

Cost of damage to a 2,000-sq.-ft. home by 6 inches of floodwater:

 Finished floor, wood, carpeting $15,870 Doors, base trim, windows
$2,150 Electrical, plumbing $320
Cleaning
$2000 Kitchen and bath cabinets $4,500 Appliances $180 Washer, dryer $150 Repairs to furnace/AC $270 Bedroom furniture $1,800 Kitchenware and food $330 Living room furniture $2,700
Computer accessories $1,100 Media equipment $150 Accent furniture and accessories $450 Personal items $650 Total $39,150 1,000 sq. ft. home is $20,150

If You Decide You Want to Purchase Flood Insurance

To get an idea of how much coverage you'll need, create a home inventory (http://www.houselogic.com/home-advice/home-inventories/home-inventory-tools) and then estimate the cost of repairing or rebuilding your home. Together, those two figures are your total potential loss.

A federal flood policy would cover rebuilding costs up to $250,000. You can also get a NFIP to cover up to $100,000 in possessions. One or both of those.

What Flood Insurance Covers (http://www.houselogic.com/home-advice/disaster-insurance/what-does-flood-insurance-cover/)

 If your home would cost more than $250,000 to rebuild, you have to buy a private flood insurance policy called "excess coverage" to insure the value of your home above $250,000. Ask your insurance agent for options.

Questions to Ask Your Agent

FEMA's online flood map locator (http://www.floodsmart.gov/floodsmart/pages/residential_coverage/rc_overview.jsp) can estimate your premium and help you find an agent who sells federal flood insurance in your community.

When you talk to an agent, make sure you get answers to these questions:

          •What will and won't be covered?

          •Are there additional expenses or agency fees?

          •Will my policy insure me for the actual cost of replacing items, or just what the items are valued at?

          •Can my zone change, and therefore, my rates? The NFIP is reworking its maps, which is resulting in some potential rate changes.

Related: 7 Myths About Flood Insurance (http://www.houselogic.com/home-advice/disaster-insurance/flood-insurance-facts/)

Three Ways to Give Energy Savings the Green Light in Your Home

ARA) – “Red means stop, green means go” – we learn that axiom as children. When it comes to home energy costs, however, going green can help homeowners put a stop to runaway utility bills. And maximizing your home’s use of natural light – call it “green lighting” – is a great way to boost your home’s energy efficiency.
Here are three ways you can put Mother Nature to work, and use natural light to lower your energy costs:

Minimize use of artificial lighting
Anyone who’s ever paid an electrical bill knows that the simple act of turning on a light can directly impact your monthly expenses. Homeowners looking for a long-term way to power down their lighting costs may consider Energy Star-qualified skylights a good investment. While skylights' cosmetic appeal can’t be argued, their value goes far beyond good looks.

By admitting natural light into your home, skylights can help reduce use of artificial light sources – and help you save on electricity costs. Pair powered venting skylights that come with automatic rain sensors with efficiency-enhancing accessories like designer blinds (available in a varied palette of colors and patterns), and you can improve energy efficiency as much as 37 percent, according to skylight manufacturer Velux America. And, with tubular products like Sun Tunnel skylights, you can even bring natural light into ground-floor rooms or spots where a traditional skylight may not work, such as a first-floor powder room, hallways, or walk-in closets.

Reduce hot water costs
Long gone are the days when solar powering your home was an idealistic, but impractical dream. Solar technology is more useful, accessible and cost-effective than ever. Solar water heating systems are becoming mainstream, and offer homeowners a great, green way to trim energy costs. What’s more, the cost of installing these systems has been steadily declining as the technology advances, and you may find adding one makes you eligible for tax credits or incentives from your local, state or the federal governments. You can calculate the costs and possible paybacks online at www.veluxusa.com.

Make home a healthier place
Every year, ill health costs the U.S. economy billions of dollars, experts say, and your own health woes can have a significant impact on your pocketbook. The health benefits of natural light are well-documented, from reducing the symptoms of Seasonal Affective Disorder (SAD) and promoting the body’s production of Vitamin D, to improving mood and even learning ability.
Simply opening blinds and curtains to admit more natural light can directly affect the mood inside your home – not to mention the mental state of the people living in it. Take your green lighting efforts to a higher level by adding venting skylights, and you can also help improve the air quality inside your home. While skylights admit ample natural light, their natural chimney effect works with your windows to bring in and circulate much more healthful fresh air. They also passively vent fumes and dampness that can lead to mold and mildew.
By incorporating natural light and passive ventilation into their home decor and improvements, homeowners can put the brakes on rising utility costs – and give the green light to energy savings.

New Massachusetts Scrap Metal Law Passes House

A law that will require scrap metal dealers to obtain a photo ID from anyone that sell metal to them has finally passed  the House of Representatives today. This bill (and various forms of it) has been back and promoted by Massachusetts Realtors for the last few years because of the rash of copper thefts from vacant, and sometimes occupied, homes across the commonwealth. Many homes have been broken into by lowlifes who cut out all the copper pipes, tearing apart walls and leaving extensive destruction in their wake, including the flooding of the property in some cases. They then sell the copper to scrap metal dealers who give them cash for it. The rise in the price of copper (and scrap metal in general) has lead to a huge increase in this activity. It has gotten so bad that thieves are stealing manhole covers, iron fences, statues, and just about any metal that they can get their grubby hands on.

This law will require the scrap dealers to get a valid photo ID from anyone selling metal, and record their information along with a description of the metal they are selling. They must also hold onto any scrap metal for at least 24 hours before reselling it. It will make it illegal for any private citizen to sell metals that are obviously not household items such as manhole covers, metal bleachers, fire hydrants, etc. Currently someone can sell those items with no questions asked.

See more information on the law and scrap metal problem below:

http://www.malegislature.gov/Bills/187/House/H03723

http://www.salemnews.com/local/x67365945/Bill-aims-to-end-rash-of-metal-thefts

http://boston.cbslocal.com/2011/07/19/coakley-wants-laws-to-track-scrap-metal-sales/

http://www.tauntongazette.com/news/business_news/x2063885724/Massachusetts-scrap-metal-dealers-push-for-tougher-laws-to-deter-thieves