Fifty-six percent of consumers recently surveyed believe that a standard homeowner’s policy covers flood damage. But they’re wrong, and their assumption could be costly.
A survey by insuranceQuotes of about 1,000 consumers shows a lot of misunderstanding when it comes to home insurance – specifically what’s covered and what’s not.
“Being misinformed about your home policy can be an extremely expensive mistake – especially when a few inches of water in a 1,000 square-foot home can easily cost over $10,000 in repairs,” says Laura Adams, senior insurance analyst at insuranceQuotes. “There are a number of widespread myths ranging from coverage for dog bites to items stolen from your car that frequently trip up policyholders.”
Consumers tend to overestimate the amount of coverage they have when it comes to flooding, according to the study. While 81 percent of survey respondents knew that valuables stolen from their home were covered under most standard homeowner’s policies, only 28 percent knew that renter’s insurance would cover valuables stolen from their cars.
“It’s critical for consumers to thoroughly explore their options and really understand the protections that are included or excluded with a standard renter’s or home insurance policy,” says Adams. “Don’t wait until right before a big storm is headed your way to get coverage because there may be a waiting period.”
Flood insurance is a particularly hot topic to address with clients lately. The National Association of Realtors® (NAR) has been warning members about the threat to homeowners and property sales when the National Flood Insurance Program (NFIP) expires on Sept. 30. More than 22,000 communities nationwide rely on NFIP to protect them from flood risks, like torrential rain, swollen rivers and lakes, snow melt, failing infrastructure, storm surges and hurricanes.
“When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result,” NAR President William E. Brown recently said in a statement. “That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection.”
NAR says it’s working with lawmakers to strengthen NFIP and also create a path for a private market to take hold ahead of the Sept. 30 expiration.
Source: Melissa Dittmann Tracey, Realtor Magazine
© Copyright 2017 INFORMATION, INC. Bethesda, MD (301) 215-4688