Essential Flood Insurance

Charles Farris explains the damage left behind by flooding. He says, "There was an L-shaped nice white leather couch here. Every piece of furniture had to be removed from the house because of the risk of mold. It was heartbreaking. It was heartbreaking."

Charles Farris' waterfront home took in more than two feet of water in Superstorm Sandy last year. His insurance came nowhere near covering the cost of replacing everything he lost.

Consumer Reports Money Adviser says there are many misconceptions about flood damage and insurance.

Tobie Stanger with Consumer Reports Money Advisor explains, "Homeowners insurance doesn't cover flood damage for either your home or your belongings. For that you need flood insurance. And we recommend coverage both for your home and its contents."

Be aware even with contents coverage, you'll only get the value of your belongings when the flood hit, not what it will cost to buy everything new.

Tobie says, "If you're a homeowner, getting enough coverage for the structure itself is also really important. Our advice: Get as much coverage as you can."

The website can help you determine the amount of available coverage and the estimated cost. Most residential flood insurance comes through the Federal Emergency Management Agency, so the terms and costs are standard.

Tobie points out, ""A warning: Just because you don't live near a body of water doesn't mean you don't need flood insurance. Heavy rains could cause flooding. In fact, 1 in 5 flood claims comes from an area that's not considered high risk."

Charles Farris regrets not having adequate flood coverage. It's a mistake that's costing him plenty out of pocket.

Charles says, "To bring it back the way it was, I think I'm looking at 80 thousand dollars including contents."

Consumer Reports Money Adviser says one way to keep reduce flood insurance premiums down is to raise your deductibles.

Also check to see if you can pay a lower premium if you locate your central air-conditioning unit and other home systems above the flood line.

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