Finance

Why should you buy a flood insurance policy?

With flash floods and thunderstorms striking more often, it becomes crucial to make sure that your property is covered against damage caused by floods. Typically, property insurance covers the damage caused by floods to some extent. However, if a flood strikes, then you realise that the damage caused to the property and contents in your house is much larger than you estimate. Thus, the settlement you get under basic property insurance looks insufficient. Therefore, you need to buy flood insurance and secure your property against huge damage costs due to flooding.

Despite the fact of India, especially the coastal regions, being prone to floods, flood insurance is not so commonly preferred insurance policy. As an insured person, you can receive coverage amount for your belongings in the property. You might not have to pay for any replacements of the damaged belongings. The details of the deductibles differ based on the insurer you select. A flood insurance policy can cover your property under various flooding scenarios like:

  1. River floods – This type of flood occurs when the water in the river exceeds its capacity and overflows.
  2. Surface floods – This type of flooding is caused due to excessive rainfall and a possible outbreak of nearby waterbody.
  3. Coastal floods – Coastal floods are caused due to extreme tidal conditions causing floods in coastal areas.

Here are three reasons why you must consider buying flood insurance for your property.

Some calamities and the damages caused by them are out of control. But what can be controlled is the loss you might suffer after a disaster takes place, and this depends on the insurance you invest in. If you are still unsure why to buy flood insurance, then here are the top three reasons that will convince you of the importance of flood insurance.

  • Flood insurance is affordable for places that are less likely to suffer floods – Floods can cause huge damage to the properties and their contents. You will be surprised to know that majority of the claims for flood insurance settlement come from areas that are not prone to floods. Recently, Jaipur in Rajasthan experienced a flood that caused tremendous damage to lives and properties. This shows that you cannot count an area safe from floods because it is away from water bodies or not a coastal area.
  • Living in an area that hasn’t experienced floods doesn’t mean it is safe from floods – Flood zones, which are the areas determined by the government as flood-prone areas are usually declared based on past conditions. But the climate conditions are changing due to global warming, pollutions, and other factors. Hence, we are seeing floods striking in areas that never saw rain and heatwaves in cold countries. There are many examples that suggest it is a good decision to be covered against a calamity even if it hasn’t occurred in the past.
  • The Damage Caused by a Flood can Bc Catastrophic – Floods are a very common calamity in India, especially in coastal areas. Even a few inches of flooding in your home can cost you a huge loss. Imagine what a severe flood might cost you to repair and replace the damage caused to your property and its contents. To avoid landing in financial trouble after experiencing such wrath of nature, you must buy flood insurance coverage with your property insurance.

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