Far too many people don't think about flood insurance when buying insurance. Floods actually are the most common type of natural disaster, and most typical homeowner policies do not provide flood coverage. If you don't think you need flood insurance, just know that FEMA says 25% of all flood insurance claims come from people living in moderate to low-risk areas.

Don't expect the government to just bail you out. While getting caught in a flood would be a disaster for you and your family. But if the government does not declare it a disaster, there are no funds to be had. Be careful, those funds are often in the form of a loan anyway.

If the water is approaching your driveway, it is likely too late to get flood insurance, there is often a 30-day wait before it kicks in. If you are wondering exactly what flood insurance covers, remember it's water that comes from the ground as opposed to the sky. So you need flood insurance for things like storm surge or swollen rivers, but if a hurricane blows a tree into your home, homeowners insurance will cover any water damage from the rain.

I'm not going to sugarcoat this, flood insurance is not cheap, if you live in a high risk area, you are looking at thousands of dollars a year. Read the fine print, most policies don't cover rooms below the first floor - so that means your basement is out.

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Editors' Pick: Originally published on October 6, 2017. 

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