The torrential rainfall and subsequent flooding last week in Duluth, Minn., may have you wondering if you need flood insurance.
Less than 2 percent of Illinois residents and business owners have flood insurance, according to a 2008 report from the Federal Emergency Management Agency.
Generally, homes are restricted from being built on a flood plain, but FEMA estimates about a quarter of flooding insurance claims occur in areas not recognized as being vulnerable to flooding, as was the case with a number of homes and businesses in Duluth. That much rainfall in a short period of time had been recorded only twice in the past century, the state’s meteorologist told the Star Tribune.
Most homeowner’s policies specifically exclude coverage for floods or water that backs up through sewers and drains or overflows from sump pumps so additional coverage in form of flood insurance to protect both property and contents is necessary to protect against such risk.
The average cost of a flood insurance premium in Illinois is about $740 a year, which FEMA noted in a 2011 report is “just $2 a day for financial protection from what could be devastating effects of a flood in a home or business.”
As with all optional coverages including flood insurance, it’s important to weigh risks vs. costs. About 40 flash-flood-causing storms occur in an average year in Illinois, according to a 1992 study from the Midwestern Climate Center; Minnesota’s climatologist was quoted as saying “we’re seeing a higher frequency of these extreme rainfall events” in the Star Tribune.
While flooding is a rare occurrence, but even a few inches of water can cause extensive, costly damage.
If you’re pondering flood insurance, an insurance agent with Axcess Insurance would be happy to discuss your risks and can tailor a policy to fit specific needs.