Is Flood Insurance Worth It?

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KNWA/ Fox 24 via CNN — Millions of people have been impacted by historic flooding across Arkansas, central Texas and Oklahoma. The floods have left behind a path of destruction and we have more on just how expensive a flood recovery can be. Big floods like these can make you wonder just how protected you are in the case of a natural disaster. Flood damage is generally not part of most home insurance plans and in some areas you may not need at all. Make no mistake, the cost of cleaning up after a flood can be expensive.

FEMA’s floodsmart.gov allows you to input some figures to see what it would cost to recover from a flood. If you have a 2,000 square foot home and experience a 6 inch flood, the floodsmart tool estimates you could face more than $39,000 in damage or losses. If you don’t have flood insurance you could be on the hook for that entire cost. Even though that damage can be expensive, flood insurance is expensive, as much as $650,000 per year. Even though floods could happen anywhere, if you live in a low-risk zone, it may make more sense to set aside money to pay for repairs as opposed to investing in an insurance policy.

The key in this situation as with any potential disaster, is to be prepared. An emergency fund is smart investment regardless of where you live.

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