It's Flood Season. Are You Protected?

Another way to pose the question: Do you want to sink or swim?

Car in a flood and water to the garage door handle.
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Spring is a favorite season for many, but people who have seen their house swept away in a flood probably feel that summer droughts and blizzards get a bad rap.

Thanks to heavy rains and melting snow, March and April are months particularly prone to flooding, although flooding can happen any time of the year and throughout the driest of states. Floods, in fact, occur more than any other natural disaster, according to FloodSmart.gov, a website run by FEMA (Federal Emergency Management Agency). In many parts of the country, almost as sure as spring is the prospect of a spring flood.

One of the worst. One hundred years ago, on March 25, 1913, the Great Flood of 1913 stormed at least 14 states, becoming a killing machine in Ohio and Indiana, taking more than 700 lives and snuffing out more than a thousand people altogether, in states as geographically diverse as Michigan, Maryland, Illinois and Louisiana. (One male corpse fished out of the Mississippi River near a plantation in New Orleans had identification that suggested he met his untimely end in Cincinnati.)

Thousands of homes were turned into splinters, and many houses were carried down rivers, some containing petrified individuals and families still inside. The lucky ones sat on their roofs under rain and snow, trying not to freeze and starve to death. Hundreds of thousands of people were left homeless. Not one of them had flood insurance.

Flood insurance was occasionally attempted as a product by the insurance industry in the late 1800s, and then again in the 1920s, but the conclusion was always the same. It wasn't profitable. It wasn't until the National Flood Insurance Act of 1968 that flood insurance became a reality in the United States.

But 45 years later, few are protected. FEMA estimates that 5.6 million people have flood insurance. Put another way, the Insurance Information Institute indicates that only 18 percent of Americans carry it.

"Ironically, agents and brokers typically know very little about flood insurance," says Amy Bach, the executive director of United Policyholders, a San Francisco-based nonprofit information and advocacy group for American insurance consumers.

Bach says she was presenting at an insurance summit in Toronto last week, and when she asked insurance agents, brokers and adjusters for their best tips on buying flood insurance, only two people out of approximately 200 in the audience raised their hands.

And the advice they offered, says Bach, was as basic as it comes. One said people shouldn't build in a flood zone, and the other said consumers, especially those with expensive homes, should purchase excess flood insurance.

So if you're considering flood insurance, here are some important things to know.

Who you buy it from. Your insurance agent. Contrary to popular belief, the National Flood Insurance Program (NFIP) doesn't function as an insurance agency. You can find insurance agents who sell flood insurance through its website, FloodSmart.gov, however.

The price. According to FloodSmart.gov, the average flood insurance policy runs about $600 per year. If you live in a moderate- to low-risk area—nearly a quarter of the NFIP claims come from homes in that type of terrain—you can get coverage for as little as $129 per year. On the other hand, if you live in, say, a $300,000 home near the ocean, especially where hurricanes and flooding can be a factor, you might easily pay a couple thousand dollars a year for a flood insurance policy.

What flood insurance covers. "Flood insurance covers the structure of the house up to $250,000 max, and up to $100,000 of personal contents, only if they are on the ground level and above," says Toni Hoy, a flood specialist at Hill & Stone Insurance Agency in Lake Bluff, Ill.

It is also important to remember that flood insurance covers ground water coming into the home. So if a rainstorm damages your roof and the water pours in from above, soaking your carpet and shorting out your computer, your homeowners insurance should help you out, while your flood insurance policy won't.