Hurricane Katrina was a
horrific wake-up call to homeowners and renters nationwide who don't
have flood insurance.
Only 40% of the
residents in the flooded areas were covered by a policy, according
to the Federal Emergency Management Agency (FEMA). Most of those who
did were required to have flood insurance in order to obtain a
mortgage.
The 60% of folks who
didn't have flood insurance fall into two categories: They were
either renters, and therefore not required to purchase the insurance
(although they could have), or they were homeowners with no mortgage
(who also had the choice — but not the requirement — of purchasing
coverage). Needless to say, this uninsured group faced a grim
reality. Regular homeowners' and renters' policies cover damage from
wind or rain — water that comes from above — but not water that
comes from below. These folks had to rely on federal disaster aid to
repair the damages.
Is your home at risk
for flood damage? If so — and if you don't already have a policy —
now's as good a time as any to act. Fortunately, flood insurance is
relatively inexpensive, and purchasing a policy is simple.
