As I promised in an earlier post, this entry will ATTEMPT to clear up some common misconceptions concerning flood insurance.

Misconception #1: "Flood insurance rates will vary from company to company.  You can "shop" flood insurance and find the best price."  WRONG

Fact:   Companies selling flood insurance DO NOT set flood insurance rates.  The Federal Emergency Management Agency (FEMA) provides flood zone information to establish the insurance rates.  Once an area's flood zones and rates have been determined and established by the Federal Government, all companies offering National Flood Insurance provide coverage at the same price.  It is imperative that a buyer work with an experienced, well versed insurance agent that knows how to correctly quote flood insurance.

Misconception #2: "Some areas are not in a flood zone"

Fact: As I discussed in my earlier post, all real estate is located in a flood zone.  The question is not, ARE you in a flood zone?  The question is, WHICH flood zone is your home in?

Misconception #3:  "If the property is not located in a high risk flood zone then buying flood insurance is an unnecessary waste of money"

Fact: 25% of flood losses occur in areas that are deemed to be low or moderate flood risks.  25%........WOW. If you property is located in a low or moderate risks are the cost of the flood insurance is typically reasonable.

Misconception #4: "If the property is not located in a high risk flood zone and the home floods, the homeowners policy will cover the damage."

Fact: This is one of the most dangerous and common assumptions out there.  Most homeowners,business,mobile-home and renters policies exclude flood coverage. 

Misconception #5: "If the property in not located in a high risk zone and is not near water i.e. pond,lake,river,stream etc, then it will not flood."

Fact:  A flood is defined by FEMA as "general and temporary condition during which two or more acres of normally dry land area, or two or more properties, are partially or completely inundated".  Some (but not all) of the ways this can be accomplished is:

• A rapid and slow draining accumulation of surface water from heavy rainfall or snow
• An overflow of inland or tidal waters
• Storm surges from tropical storms or hurricanes
• Mudflows

Misconception #6:  "If the property floods and there is no flood insurance the federal government (FEMA) will take care of me"

Fact:  ROFLMAO, I live in South Louisiana!!!!! ROFLMAO  Are you kidding me?!?  No seriously, please do not rely on FEMA, make sure you and your biggest assets protected.