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Flood insurance: Worth it, or waste of money?

Homeowners wonder after more flooding rains
Posted: 6:03 PM, Feb 26, 2018
Updated: 2018-02-27 01:06:37Z

From the air, Sky 9 showed homes and summer cottages in the Village of Newtown under water, after the Little Miami river overflowed its banks.

Longtime homeowner Shauna Turner was running pumps to get the water out of her basement.

"We lost so much," she said.

Among  her losses,"furniture, all my sons books and stuff, a pre World War II Lionel train..."

Turner has a low cost flood insurance policy from her mortgage company. But she says it excludes possessions.    

"We have it but it's useless," she said. "The flood insurance only pays for structural damage, it doesn't pay for personal property."

That's why it's important to research flood insurance policies before you buy.  You have many options, and this is one case where cheaper isn't a better deal.

Flood insurance options

Ron Eveligh, Cincinnati Insurance Board director, says a flood policy costs about $500 - $800 a year for $250,000 of coverage. It is sold by the federal government, through local insurance agents.

However, if you live in a designated flood zone like Newtown or New Richmond, it can cost $1,500 or more per year.

Mortgage companies may offer you a bare bones policy, like Shauna Turner's, for around $300 a year, but be careful:  most of those cover just structural damage to your home, and not personal items like carpeting and couches.

Meantime, don't think your agent will be able to help you if water rushes in to your home, and you don't have coverage. Your homeowners' policy will not cover flooding.

"There is no flood coverage unless they have a flood insurance policy," Eveligh said.

Cheaper alternative for many

For a lot of families, however, an extra $700 a year is really too rich for their budget. But there is a cheaper alternative worth looking at: drain backup insurance.

Drain or sewer backup protection is an add-on, or "rider," on your existing policy, for about  $75 a year.

"Back up sewer coverage is offered by a majority of insurance companies, and it can be added to your homeowners policy," Eveligh said.

Drain backup coverage covers you for storm water or sewage that comes up drains, which is very common these days as storms seem to get bigger and last longer. And it is incredibly affordable, at just $5 a month or so.

The website Insuramatch has a good explainer of all the different types of insurance available, so you don't waste your money.

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