Let's Prove We Learned From Katrina And Buy Flood Insurance

Price isn't a factor, Dixon said.

If you don't live in an area with a high risk of flooding, your premium could be as low as $112 a year, which would cover about $20,000 in building damage and $8,000 in contents. You have the option of selecting coverage in a range of yearly premium amounts. For example, for $180 a year, you can get $50,000 in building coverage and $20,000 in content coverage.

If you want more protection, and, again, if you aren't in a high-risk area, you can expect to pay as much as $317 a year for $250,000 worth of building coverage and $100,000 in content coverage. That's about $26 a month. It would cost two people more than that to go see "Mission: Impossible III" with popcorn and sodas.

Here's something else you need to know and probably don't: Flood insurance does not cover improvements to a basement, such as finished walls, floors, carpeting and personal belongings.

It does cover your home's foundation. Functional items in your basement are covered under your policy's building coverage, such as plumbing, furnace, water heater and circuit breakers. Other limited items, such as a washer and dryer or a freezer, are covered under your contents coverage, which must be purchased in addition to building coverage.

In fact, Dixon said that was another reason some people gave for not buying flood insurance. This was particularly true for people who live inland. "It makes the policies less attractive for people with basements," he said.

However, for the purposes of this insurance, the definition of a basement is when the lowest floor is below ground level on all four sides. Therefore, in areas where homeowners typically have basements that are aboveground, flood insurance would cover carpeting, furniture, televisions and improvements, according to FEMA spokesman Aaron Walker.

Flood insurance does not reimburse you for expenses if you are forced to temporarily relocate.

But even with its limitations, flood insurance is worth getting.

If your community participates in the NFIP, you can purchase flood insurance from a licensed private insurance company or through an independent property and casualty insurance agent in your state.

For information on flood insurance, go to http://www.floodsmart.gov/ .

Last year, as I read reports of Katrina families and their hardships, I made a mental note to purchase flood insurance. But I didn't do it. This year, I will. I don't want to learn my lesson the hard way.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

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