Flooding isn’t covered by standard homeowners insurance, so you have to get flood insurance if you want to protect your home and possessions from the rising waters of flood. But what is flood insurance? How does it work? What should you expect to pay? What are some alternatives that could save you money? Read on to learn more about insurance about flood and what you can do to make sure your house and your belongings are protected in the event of flooding!
What is Flood insurance?
Flood insurance is a type of homeowner’s or renter’s insurance that can cover expenses incurred when your property is damaged by floodwaters.
Flood coverage is typically provided through the National Flood Insurance Program (NFIP), which means your premiums are typically subsidized.
When a flood occurs, you file a claim with your insurance company who then notifies FEMA. FEMA then works with the affected state to assess damages and come up with an estimated cost of reconstruction for public buildings and roads in the affected area
Is Flood insurance required by law?
Property owners in high-risk areas are required to purchase flood insurance through the National Flood Insurance Program. If you live in a low-to-moderate risk area, you may also want to consider purchasing your own flood insurance through an independent agency (depending on your home’s value) or with a private carrier.
What does Flood insurance cost?
According to FEMA, the average yearly premium for flood insurance is about $700. In general, homeowners should expect to pay more for their policy if they have been flooded before or if they have taken out mortgages that require them to carry both property and casualty coverage.
Flood insurance vs. homeowners insurance
The difference between flood insurance and homeowners insurance is that they are two different types of coverage that provide protection against completely different risks. Homeowners insurance will cover you for everything from theft to fire damage, but not flooding. Flood insurance covers flooding caused by water-related catastrophes such as hurricanes or tsunamis, which usually cause more extensive damage than a simple house fire.
To break it down, here’s a list of hazards covered by homeowners insurance, and those covered by flood insurance:
| Damage | Homeowners Insurance | Flood Insurance |
| Sump pump | Yes* | No |
| Sewer water | Yes* | No |
| Basement water | Yes* | No |
| Broken pipes | Yes | No |
| Rain water from window or windstorm | Yes | No |
| Accidental discharge of water or steam | Yes | No |
| Flood | No | Yes** |
| Windstorm or hail | Yes | No |
| Ice, snow, sleet | Yes | No |
How can I determine my flood risk level?
Use FEMA’s online map tool to find out what zone your house is located in, then contact a local agent who sells NFIP policies for more information about available coverage options near you.
When should I buy flood insurance?
Not all insurance companies offer flood damages for floods. However, if your house or building is located in a 100-year flood zone as designated by FEMA (Federal Emergency Management Agency), you should buy insurance with an A.M. Best rating of A++ or higher to cover flooding because most insurance companies will not cover those damages outside of this range.
Are there alternatives to buying flood insurance?
People can also opt to purchase private flood insurance policies to supplement their federally backed coverage. Other solutions include moving to an area where the risks of flooding are lower, or raising a home higher off the ground. Those who live in areas that may be threatened by flooding will be better served by buying flood insurance than they would with any other form of protection.
Types of Flood coverage available
There are two types of flood coverage offered by NFIP – Building coverage, and Content coverage. Dwelling coverage covers the damage that flooding can cause to the structure of your home, built-in appliances and attached structures. Contents coverage covers your personal belongings, such as your clothing, furniture and home decor, up to your policy limits
Things you need to know before purchasing a policy
To help you understand the process of purchasing a flood insurance policy, here are some questions to answer before you make that call.
How much coverage do I need?
You should consider how much the structure is worth.
How does the cost vary based on location?
The cost varies by what area of the country you live in, its risk for flooding, and if any past flooding has taken place.
Is there a cap to the amount I can claim under my policy?
There is not a set cap to the maximum amount you can be reimbursed. However, FEMA recommends not spending more than 10% of your annual income on your home’s value because if you exceed this amount and then have another disaster, you may not be able to afford another major event without taking out an additional loan or refinancing your home.
Where can I find more information about flood insurance?
If you live in a high-risk flood zone, a good place to start is your local FEMA office. For those who are not in such an area but want to learn more about the different types of flooding insurance available, FEMA provides a list of state insurance departments that can give more information on this topic.
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