Wow! Don't Make this fatal mistake if you are selling your home FSBO or For Sale By Owner! In my recent book, The Ultimate In Your Face SoldByOwner Guide to Sell Your Home, I
Albuquerque Flood Insurance Can Be Crucial Despite How Crazy It Sounds
Ah, the paradox of water. We soak in it to soothe tired muscles, we relax to the sound of it falling on the roof, we frolic in it on the shores of lakes, rivers and oceans. Water nurtures life – without it we can’t survive.
Yet it can also turn deadly. In Albuquerque, it is rare to have homes in flood plains, but it still happens. If your home is at the bottom of a mesa, or anywhere near the Rio Grande river, pay attention. Just a few years ago, we had some pretty catastrophic flooding during one of our monsoon seasons, and some homes were severely damaged. In my volunteer efforts with the American Red Cross, I responded personally to a couple homes flooded with feet of mud inside their homes, because the homes were at the bottom of a cliff and the water washed debris their way.
Flood, in fact, is the number one disaster in the United States, costing nearly $2 billion in insurance claims each year. The average claim is $46,000, according to the National Flood Insurance Program (NFIP). Sadly, only 15 percent of homeowners carry flood insurance on their homes. If you aren’t among them, do you have a spare $46,000 lying around?
In Albuquerque and New Mexico, most homeowners do not need the extra coverage that flood insurance provides. How do you know if you’re among them? Let’s take a look at some common misconceptions that keep homeowners from buying the coverage that may save them from financial catastrophe.
My homeowners insurance policy covers flood damage
Oh, does it now? “Standard homeowners and renters insurance does not cover flood damage,” according to the Insurance Information Institute. You’ll need to purchase a separate policy to be covered for this disaster.
Even if you have flood insurance, revisit the policy at least once a year to ensure that it provides the right coverage for your current circumstances. NFIP, for instance, covers up to $250,000 for the home’s structure and, for personal possessions, $100,000. It is the latter coverage you want to keep an eye on. If you acquire expensive items that might be damaged or lost in a flood, you may need to increase your personal possessions coverage.
Keeping in mind as well that even just a minor water intrusion into the home can cause thousands of dollars in damage, flood insurance coverage becomes even more important.
Flood insurance is too costly
According to NFIP, you’ll pay an average of $650 a year for the peace of mind you’ll receive from carrying flood insurance. Compare that to the aforementioned average claim ($46,000) and the choice as to whether to purchase the insurance or not is quite clear.
My home isn’t located in a flood plain
When you buy a home in Albuquerque, it’s pretty obvious if you should think about flood plains. However, water in Albuquerque does not soak in well, and rushes toward the Rio Grande. Be aware that “Many conditions can cause flooding: spring thaws, heavy rains, hurricanes [lol, not in Albuquerque, ignore this one] and the rapid accumulation of rain after a wildfire are just some of them,” according to the experts at Allstate Insurance. It can happen anywhere at any time.
In fact, one in five claims for flood damage come from homeowners who live in areas deemed in moderate to low risk of flood, according to the Federal Emergency Management Agency (FEMA). The danger here is that lenders typically won’t require flood insurance on homes located in these lower-risk areas. It is up to the new homeowner to protect herself. A good rule of thumb in Albuquerque is to look up – does your home sit below land at a higher elevation? Where does the water go, if so? Are there arroyos to handle the excess waters of monsoon season?
I can’t afford it now – I’ll wait until it appears I may need it
Would you wait until after your home burns down to try to purchase insurance? Of course not, and, according to FEMA, “There is usually a 30-day waiting period after premium payment before the [flood insurance] policy is effective.”
There are exceptions to the waiting period rule and you can read about them on FEMA’s website.
It’s difficult to think about paying extra for your homeowners insurance, especially in Albuquerque , when you’re in the midst of the huge cash layout that a home purchase requires, but the consequences of not being prepared for a flood can be devastating. Research the area in which the home is located within Albuquerque and weigh the risks. Visit the FEMA website for information from the Flood Map Service Center to help you decide.
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