Flood Insurance

As simple as it sounds, flood insurance covers floods. Most people do not understand flood protection is not part of the package they get with their homeowners policy. It's also not just for folks who live along the water.

Who needs it?

Folks on the coast -- People living along the coast or along a river should have protection, especially if they are listed in a flood zone. Your agent can help you figure that out.

Land-locked -- According to Michael Brown with FEMA (the Federal Emergency Management Agency), nearly one third of all claims that come into the flood insurance program are from areas that are away from the water.
>>Anywhere it snows
If there's a heavy snow, the snow eventually melts and goes somewhere.
>>Areas with sudden thunderstorms
A sudden storm can bring a downpour and rain can back up anywhere.
>>Where there's heavy growth
With development, sometimes there's not enough capacity for the water to go somewhere, which can lead to urban flooding.

The cost -- The average price of a policy is $300, but it will vary, depending on several factors. Those factors include the amount of coverage you need and the region where your house is located.

Bright Idea!
Don't wait until you see a storm coming to get coverage. The policy does not become effective until 30 days after the premium has been collected and the policy has been signed. One exception is when you're buying a home and need the insurance to close on the mortgage. In that case, the policy kicks in as soon as you pay.

Flood insurance is critical to many of us, but there are some policies out there you may not need.

Robert Rusbuldt, President of the Independent Insurance Agents and Brokers of America (IIABA), says there are some policies out there that are so specific, they're really a waste of money: "Either you're already covered for it and you don't know it. Or, if you're not covered for it, the chance of cashing in that policy is almost nil."

Credit Life

One to avoid, according to the IIABA, is credit life insurance. You buy it for big-ticket items like homes and cars. If you pass away before the item is paid off, it pays the creditor…so your survivors are debt free. But, it's not always a value. "99.9 percent of the time, if you're buying credit life insurance, you're wasting your money. If you have life insurance already, you don't need credit life insurance. If you have no dependents, you don't need credit life insurance," says Rusbuldt.

Product-Specific Policy for Homes

You should also generally avoid any policy that only insures one thing in your home. "Somebody breaks in and steals your computer, your homeowners insurance is going to cover that. So, buying additional coverage for a computer that you use for your personal use is a waste of your money," says Rusbuldt.

But, look over your homeowner's insurance policy first and know what's covered. You may find some items, like jewelry, are left out. In that case, extra coverage
might pay off.

Specific Health Policy

The IIABA says a red flag should also go up if you're looking at a health policy targeted at a specific illness, like cancer, heart disease, or stroke. Although they may seem inexpensive compared to basic health insurance, experts say the coverage is narrow and often has many exclusions.

Bright Idea!

Saving Money

So, how can you save money on the insurance you do need? Make sure you take advantage of every discount you are eligible for. Insurance companies offer many breaks, including discounts for:

Good drivers

Good students

Loyal customers

Customers who insure multiple cars or homes and vehicles with one company.

Defensive driving classes.

Smoke detectors

Home security devices

Higher deductibles

Maintaining good credit.

Insurance Information Institute

Read more smart consumer tips and strategies
from Fox11 Eyewitness News Online

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