How to stay high and dry financially, even when waters rise

The devastating flooding in New Orleans this past week was a reminder of the power of nature.  One family who was interviewed said they had just finished building their house, and now had to tear everything out and start again.  That potentially means a financial loss and displacement for an extended period of time as well as quite an emotional toll.  And sadly, the damage and destruction is widespread.

However, homeowners can take steps before waters start to rise to protect against being wiped out financially from the losses to property and the displacement that can go with a flood.

One way to prepare is to make sure you have adequate insurance coverage.  Homeowner policies do not necessarily cover such incidents.  Also, there are technical distinctions between rain, water backup, and flood, so it is important to review how they are defined in your particular policy.

Coverage for rain damage and water backup may be available through homeowner policies, sometimes at an additional cost.  It is critical to make sure that a satisfactory level of coverage is included in the policy.

Flood insurance is sold separately from standard homeowner insurance policies, however. It is available through the National Flood Insurance Program, managed by the Federal Emergency Management Agency (FEMA). Flood insurance should be considered if living in a low area or near a river or other body of water.

Your insurance professional should be able to help you identify and procure appropriate coverage tailored to your specific needs.

Water may be necessary for life, but it can be devastating when in the wrong places.  To our friends in Louisiana, we wish a speedy recovery.  To our neighbors here, we hope that you never are involved with a flood situation – but if you are, that you have taken steps in advance to ease some of the financial and emotional impacts of the disaster.