I'd like to tell a story about an elderly couple in Arkansas who didn't think they needed to worry with flood insurance. They saved their whole lives and scrimped to get by on a meager salary and they paid on their home faithfully because it was all they had. They lived in a town with no lake near them and far away from any river. Surely they didn't need to worry about their home every flooding.
What they didn't realize was that a brand new subdivision a few city blocks away had built a retention wall and created a 'pond' for their own residents. This particular subdivision also happened to be well uphill of them.
One spring, the rains came and it poured and poured. The water began to flow over the retention wall and eventually the wall itself gave away and the water poured down onto the homes that were all down hill from there. The old couple were suddenly under over a foot of water in their living room. The water came rushing in and carried their dreams of the retirement home out the door with it. Ten years later, they are still trying to recover. Why? They didn't have flood insurance and they have lived without carpet and with water damage all these years since.
They few things they could repair, the walls and insulation, they did themselves. They home, which they worked and slaved to pay off and raised their children in, was destroyed right before their very eyes. In just a matter of moments their entire investment and life savings was wiped-out. All because they didn't think that they would ever need flood insurance. The saddest part of all is that this insurance is really not expensive. They could have been fully covered for the damages, instead of sitting in a home ten years later that still bears the scars of a flood that was man-made and shouldn't have ever happened.
Flood insurance is one type of insurance that is actually very reasonable and is well-worth having. With the average cost of flood insurance being only about $300 per year, it makes no sense to have it. You can't even replace one room of carpet for $300. Don't try to save money and cut corners. You could end-up like my elderly friends, with so very little to show for all your hard work and years of home payments.