What is the current situation in California?
The Golden State has taken a big hit due to the rainfall at the end of last year. Not only this the water cause mudslides, but also flooding in the streets which caused a lot of damage to homes.
The area is known for floods and over the past decades, multiple areas have been announced as “high-risk” areas for flooding. This means that residents in California know the possibility of floods happening.
This does not mean that floods happen everywhere all the time. But as we can see the global trend of flooding, we see them becoming heavier and longer.
This also is something that occurs in California and this time, a lot of people were underprepared.
Does homeowners’ insurance cover flooding?
Within homeowners’ insurances, people are free to choose their own details. You could therefore, choose to get a quote for a homeowners’ insurance the does cover flooding, or try to save money monthly by not having this part covered.
Depending on the area, whether you live in a high-risk area or not, what your property is like and more, you can expect a quote from as little as $300 premium per year to over $13.000 premium per year.
However, the average cost of flood insurance is about $700 nation-wide.
The question of buying flood insurance, obviously depends on your personal situation. Not only financially, but also as a precaution to protect you from possible future damages.
If you live in Indiana, the chances of a flood happening are significantly lower than when you live in California and this part of your homeowners’ insurance might not be as interesting to you.
Why is the damage in California so bad for homeowners?
If you read our web pages and news stories, you notice that our advice is always to protect yourself when the risk is high.
The numbers in California were therefore very shocking, as it appears that only less than 2% of homes in California were covered for flooding in their homeowners’ insurance. Even though it is very obvious that California has a high track record for floods.
This means, that a lot of people affected by the flood, are not covered and need to pay damages and repairs themselves. Which can be a huge cost, if your whole house has been damaged inside and out by the water.
As we see residents now running to insurance companies (most of them not being affected, but getting close to the floods), the insurance rate should go up.
However, getting an insurance this close after disaster, could mean that your quote from the companies rise significantly and you might get high premiums, rather than a nice deal.
The importance of a homeowners’ insurance has once again been demonstrated and this is the reason why pre-emptive measures are better than after-the-fact actions.
Comparing your home insurance companies and finding out the best deal ahead of time, can save you thousands in premiums per year and will save you tens of thousands in the long run if you would be uninsured and disaster strikes.