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What you don't know about flood insurance could hurt you

Consumer Reports News

This spring's floods in the Midwest, against the backdrop of Hurricane Sandy's six-month anniversary, underline why a purchasing a national flood insurance policy can be so crucial regardless of where you live.

A lot of homeowners apparently don't realize they need flood insurance. Consumer Reports' recent survey of Hurricane Sandy victims shows that 30 percent of homeowners affected by Sandy needed flood insurance and didn't have it. Another survey, by the financial data publisher Bankrate.com showed that only about half of Americans even know whether their home is in a high-, moderate- or low-risk flood area.

The NFIP has been redrawing flood maps in recent years, and some homes formerly considered moderate-risk may now be high risk. The bank holding your mortgage likely would tell you of such a change because it's in the bank's interest to protect your home. But if you've satisfied your mortgage, you might not find out.

Keep in mind, too, that living outside a high-risk area doesn't make you immune to damaging floods. According to the National Flood Insurance Program, a division of FEMA, more than 20 percent of flood claims each year come from homes located in areas that aren't considered high-risk.

You can check out your area's flood map here to determine your property's flood risk. And Check Consumer Reports advice on buying flood insurance, as well as our Ratings of homeowners insurance and auto insurance.

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