Hurricane Katrina is 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.