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Flood Insurance + Hurricane Sandy = A Sign?

by J. Money on Monday, October 29, 2012

hurricane sandy nasa shot

So I don’t know if this is a sign or not, but we literally JUST got a notice in the mail asking if we wanted to renew our flood insurance for the year ;) Right as Hurricane Sandy is about to hit hard and wreak havoc all around us! Yikes. (For all you reading this right now on the East coast, I hope you’re doing okay and you’re nice and safe!)

And the funny thing here was that I was literally just telling the Mrs. last week that we should probably fore go it this round because odds are we won’t need it, haha… And then of course news of Hurricane Sandy hits and everyone starts freaking out. I didn’t go anywhere this weekend with someone mentioning how bad it’s going to be, or how much water/sand/batteries they still need to get to survive this once in a lifetime storm. And now because of everyone else I’m scared too! Haha… but as my wife puts it, better to be safe than stupid. So I guess it couldn’t hurt that we stocked up a little bit too.

But anyways, back to the flood insurance stuff. By a show of hands, how many of you think it’s worth it? And how many of you have actually *purchased* some? Unfortunately I can’t see your hands right now (or maybe I’m right behind you? Boogy boogy!) but with everything, it probably depends on your comfort levels and how much risk you’re willing to accept. And where you actually reside too – though humans being what we are, there’s no telling what we could mess up and accidentally cause some flooding ourselves :( I’m just as scared as that as I am it all coming from the outside in! Haha… I ain’t no handyman, that’s for sure…

Last year we signed up to it because one of the major storms DID scare us into thinking a flood could happen at any time, even though the closest body of water was pretty far away. When it just pours and pours all day long around you, though, you can’t help but wonder if it’ll eventually rise up and force itself right into your home. And with me being gone so much with Love Drop (we were flying to a new state once or twice a month), the last thing I wanted to do was worry the Mrs. even more and have to clean up the mess if God forbid it came to that. So the extra protection w/ the flood insurance def. made us feel better – knowing we can just call up USAA right away and get the process of resolving things started ASAP. It made a lot of sense last year.

hurricane sandy sandbagsBut here we are, 12 months later, and we’re right back to making the decision yet again. Do we shell out more money for another year and gain that peace of mind, or do we take the risk and bet on the odds the flood(s) will never come and save some hefty cash?

It’s a weird situation ‘cuz on one  hand you DON’T want to use it if you buy it because it means something bad just happened, haha, but on the other hand you DO because you’ve been paying for it so long! :) I guess it’s kinda like car insurance in that regard, only that’s usually mandatory and more likely you *will* end up using at some point or another unfortunately.

Anyways, here was everything swirling in my mind before we made a decision:

  • This hurricane going around us right now is just nuts.
  • If this one doesn’t cause water damage, is it possible other ones will later this year?
  • Do we want to tap our Monster Savings if the $hit hits the fan and we didn’t sign up?
  • Or do we just pony up the measly $200 (in the grand scheme of things) and cover us a ton more?
  • How much is that peace of mind worth?
  • How annoying is it to reconsider this every single year?? (Haha…)

After some thorough chats and beers last night, the wife and I decided to just bite the bullet and pay the premium again so we can have one less thing to worry about going forward. Yes it sucks we’re out a cool $200 now, especially with all the other stuff we’ve needed to maintained around this house lately, but at the same time we’d be incredibly PISSED at ourselves if God forbid something happened and we had to activate it. I think the money lost greatly surpasses the fear of regret in this particular instance. Mainly because it would just be so incredibly expensive if a flood DID take over our entire basement! Or any other areas of the house for that matter.

So that’s what we did. We shelled out the money and locked it in once and for all as we brace for this crazy hurricane to hit. Making USAA either super brilliant with their timing of these notices being mailed, or the Big Man upstairs is trying to give us a sign to make sure and pay attention ;) Regardless though, we think it was the best move.

Here was the coverage we got:

  • Building coverage: $30,000
  • Contents coverage: $12,000
  • Deductible (for both building and contents each): $1,000
  • Amount this will cost us for one year: $191

Now we just pray this hurricane dies out before anything crazy happens! It will be pretty bad if we lose electricity considering my job depends on it, haha… Oh well… As long as we’re all safe and sound I’ll be one happy blogger :) Hope you guys stay out of trouble too! The fingers are a crossed.

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(Top photo by: NASA Goddard Photo and Video. Bottom one by: J$. See the pun? ;))


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{ 18 comments… read them below or add one }

1 William @ Drop Dead Money October 29, 2012 at 5:37 am

We live on high ground, and so we have no flood risk. The realtor who sold us our house, though, lived on a golf course and the year before lost everything, DESPITE having flood insurance. Turns out collecting on a total loss is a pretty difficult proposition. Hearing his story was one of the reasons we picked a place on higher ground.

Of course, that didn’t stop other things like hail damage, but those are not as devastating. :)

We were stuck in Cabo San Lucas once with a Force 1 hurricane a few years ago. Quite the event, with water everywhere. So… Good luck with the Sandy thing; stay dry!

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2 Lance @ Money Life and More October 29, 2012 at 7:15 am

I have flood insurance but that is because I live in Florida three blocks from the Gulf of Mexico. I’m not in a flood zone but if another Katrina hits my city directly I could see my house flooding. Honestly it is just a few hundred to make sure that if something horrible happens we are covered. Flooding seems like it would be a very expensive thing to clean up and could total a home down here easily if the power is out too if mold takes over your house. Worth it to me.

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3 Mrs. Pop @ Planting Our Pennies October 29, 2012 at 8:24 am

I would recommend reading your entire flood policy. Flood insurance is one of those things that is federally regulated to reduce costs, but that ends up making room for a lot of loopholes. My friend who lives in MD has a house that is built into the side of a hill. The first floor is technically called a “basement” because one wall is buried in the hill. Even though the basement is finished, considered livable space and she pays taxes for that square footage, a flood policy on her house would not cover the basement, even though realistically this would be the first place to flood. Water levels would have to be insane to flood the second floor.
So in her case a flood policy doesn’t do much… but some of her neighbors didn’t realize that and after Irene (it was Irene last year, right?) came and flooded some of the neighbors a few streets over with similar houses, they were PO’d that they couldn’t get any help from their flood policies that they had been paying for…

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4 Budget & the Beach October 29, 2012 at 9:40 am

Stay safe! I live in an apartment in an area not in danger of flooding, so I wouldn’t get it, but around here it’s earthquake insurance. Since I don’t own my place, I wouldn’t get that either. I have in the past had renters insurance. I toy with the idea of getting that since I do have just a couple valuable things that are important, especially for work, and that fact that this area has seen a lot of robberies lately. I still haven’t though. hmmmm.

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5 J. Money October 29, 2012 at 10:15 am

@William @ Drop Dead Money – Haha, thanks man! So far so good but it’s only the very beginning ;) We also happen to live higher up on land, but I’m more afraid of the water leaking into our basement somehow rather than large bodies of water… This round we’re adding sandbags on the outside of our house too just for extra protection. We shall see!
@Lance @ Money Life and More – Oh yeah, ESP where you live. I hear mold is allll over the place down there, freaky stuff :(
@Mrs. Pop @ Planting Our Pennies – Oh wow, that sucks! I’d be pretty pissed too. And pray that doesn’t happen to us as well! I’m pretty sure I read it thoroughly last year, as well as asked a butt ton of questions while on the phone with them (cuz if it didn’t cover my concerns then why would I pick it up?) but you still never really know if something’s missed until disaster strikes :( And hopefully we never WILL know! Haha…
@Budget & the Beach – Oh jeez yeah! You def. need that at least, and luckily it’s pretty inexpensive :) I think we pay around $20 a month maybe? And that’s with an entire HOUSE worth of stuff, so in your case it may only be $5 or $10/mo which I’d think is worth the peace of mind for sure… But we’re all different :)

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6 Trinnie October 29, 2012 at 10:27 am

Flood insurance is worth it, depending on what your concern is. I have a finished basement, and flood DOES NOT COVER putting my basement back to a finished state, so for me, it isn’t worth it, as the water would have to climb pretty high. I have to say, though, the whole idea of “i live on a mountain, so i don’t need flood insurance,” was completely proven WRONG this summer when the Waldo Canyon Fire hit COS and the Pikes Peak region. After the fire wiped out all the trees, there were constant threats of mud slides which are covered by FEMA flood, and NOT by standard homeowners policies. J, I’m glad you guys paid for 1 more year, because trust me, you would’ve gotten a NASTY lecture by me! ;)

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7 G.B. @ In Budgets We Trust October 29, 2012 at 11:21 am

Stay safe and dry, J$! Even though this storm will probably fizzle out (because that would be pretty ironic given the level of hype and doomsday type coverage!), I think the flood insurance is worth it for the piece if mind.

When I have a child, i’ll probably get life insurance so I think it’s pretty much the same thing to me… You’re preventing yourself or someone else a hardship by planning ahead for an unknown.

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8 Yana October 29, 2012 at 11:42 am

I think this type of insurance is worth having; in fact, this is what legitimate insurance is all about.

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9 G.B. @ In Budgets We Trust October 29, 2012 at 12:34 pm

Hey J$. Heard that power might already be out in your area, so I apologize for saying the storm would probably fizzle out. (I remember how easy the power went out back in July when I was home visiting family, so I figured D.C. had already met it’s horrific weather quota.) Extra good of you to buy the flood insurance now!

Stay extra safe, dry, and warm! Let us know how it goes out there.

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10 LB @ Finanical Black Sheep October 29, 2012 at 1:07 pm

I don’t have flood insurance but I am looking into it, along with changing my home owner’s insurance too. I used to think flood insurance wasn’t worth it, because it would have to rain for weeks for me to get flooded and by then everything else would be flooded first, but I have been thinking of it more lately, as there are some weird things flood insurance covers like water damage of other sorts and even sewer backup. Yeah, who knew that sewer backup is covered by flood insurance. Even if policies aren’t all the same, I would say it is something worth looking into just to see if it covers areas home owners insurance doesn’t. Stay dry and safe J., Mrs. and Baby!

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11 Jenna, Adaptu Community Manager October 29, 2012 at 1:25 pm

I don’t think there is flood insurance in Oregon – too much rain!

Stay safe!

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12 J. Money October 29, 2012 at 2:48 pm

So far so good, guys! Wish us luck our lights stay on and the insides dry! :) Though we still haven’t hit the bad parts yet, jeez… gonna be 24 hours of madness here in a little bit.

@Trinnie – Haha, I know it! And apparently USAA is pretty happy about it too as I just saw they tweeting out today’s post too ;) Gotta love our insurance family!
@G.B. @ In Budgets We Trust – No problemo my friend :) So far our house is okay! But it is getting really REALLY windy out there now – I keep staring at the trees swaying around our neighborhood :(
@Yana – It does feel pretty “legitimate,” you’re right :) And a LOT cheaper than other insurances too which is nice!
@LB @ Finanical Black Sheep – YUP! Exactly – I forgot our flood insurance covers that too – sewer backup and all that… Not a bad thing to have just in case the $hit hits the fan! LITERALLY! Haha… ;)
@Jenna, Adaptu Community Manager – What? Yeah right – I bet there’s MORE of it there and it’s damn expensive too ;)

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13 Liz October 29, 2012 at 4:01 pm

You definitely made the right decision. I’m in an area that was severely affected by Hurricane Ike 4 years ago (and Rita 3 years before that – but that was more of a wind event) and it was the storm surge that did the damage. My parents live in a 100 year old house that “took on” water for the first time, ever, and I had several friends with 4+ feet of water in their homes. Insurance is one of the only things you buy hoping to never use.

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14 Bonnie October 29, 2012 at 4:28 pm

It really depends on where you live. I live in a desert so you would think I’m safe, but we get some crazy flooding here every 10 yrs or so. I looked up our place on the flood-zone maps and felt pretty safe foregoing flood insurance.

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15 Pam October 30, 2012 at 7:18 pm

I was just down at the insurance office and I heard many people asking if they had flood insurance or not. This is crazy that some people just don’t know.

Pam

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16 J. Money October 31, 2012 at 9:10 am

Well we made it out a-okay, friends! Some messy trees and leaves outside, but overall the house went unaffected and we kept our electricity the entire time – woohoo! We REALLY dodged a bullet this round – those pictures and vids about other areas that got hit hard are just so sad to watch :( They’ll definitely be in our prayers.

@Liz – Oh man, yeah for real! We’re def. glad we ended up getting it even though all was good in the end! We still have 12 more months to go ;) And I’m loving that line too – “Insurance is one of the only things you buy hoping to never use” – so true!
@Bonnie – Jeez, really? In the desert? That’s pretty wild.
@Pam – Real scary esp after this hurricane stuff :( 99.9% of people never think about it at all, but after these storms hit at least it goes on their radar for the future!

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17 Kacie October 31, 2012 at 12:33 pm

It’s not just bodies of water nearby … sometimes intense rain can still cause flooding if you live in an area without excellent draining or such. A flood can happen anywhere, it seems!

That said, we don’t carry flood insurance. We don’t live in a flood plain and our house is slightly on a hill and it doesn’t seem to be much of a risk for our circumstances.

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18 J. Money November 2, 2012 at 5:17 pm

True that. It would freak me out no matter where I lived too, but not as much now that we have the insurance :)

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