flood insuranceA flood can strike anywhere at any time. Floods or flash floods have occurred in all 50 states in the past five years. If you live in a high-risk area, your house is more likely to get damaged by a flood than by a fire.

Even if you don’t live near a body of water, you are still at risk for flooding from a hurricane, winter storm, or melting snow. A new land development can increase the risk of flooding, especially if it changes natural runoff patterns. People who live outside mapped high-risk flood areas file more than 20 percent of all flood insurance claims and receive one-third of federal disaster assistance related to floods.

It only takes a few inches of water to cause tens of thousands of dollars worth of damage. Flash floods often create walls of water 10 to 15 feet high. A car can be washed away by just two feet of rushing water.

Homeowners and business insurance policies do not cover flood damage. You need to purchase additional coverage in order to be covered for damage caused by a flood. There are over 5.3 million flood insurance policies in force in over 22,000 communities across the country. Flood insurance claims totaled an average of $3.5 billion per year from 2005 to 2014. The National Flood Insurance Program has paid almost $50 billion in flood insurance claims and related costs since 1978.

If your home is located in a Special Flood Hazard Area or high-risk area and you have a federally backed mortgage, your lender requires you to have flood insurance. A Preferred Risk Policy can cover both a building and its contents in areas with low to moderate flood risk for a low price. You can purchase flood insurance as long as your community participates in the National Flood Insurance Program.

It usually takes 30 days for a flood insurance policy to take effect. Don’t wait until a storm is forecast to buy insurance.

Replacement cost value is the cost to replace property damaged by a flood. It applies to owners of single-family primary residences with insurance covering at least 80 percent of the building’s replacement cost.

Federal disaster assistance usually takes the form of a loan that needs to be repaid with interest. It is generally less expensive to buy flood insurance.