Not only is flooding the most common and costly natural disaster in the U.S., but it's one that many homeowners aren't properly prepared to handle. That's because flood damage caused by natural water, such as heavy rainfall, is not covered by standard homeowners insurance. Unfortunately, many homeowners don't realize this until it's too late.
To get the coverage you really need to protect your home against flood damage, work with an independent insurance agent. They'll make sure you get all of the coverage necessary to protect your home.
Does My Homeowners Insurance Cover Flood Damage?
Your homeowners insurance does not cover a flood or damage caused by natural floodwaters. While homeowners insurance covers most other natural and man-made disasters, floods are an exception. In fact, natural flood damage is specifically excluded by home insurance, so damage from tsunamis, hurricanes, heavy rainfall, etc., won't be covered by your policy.
Insurance companies consider a flood to be any natural gathering of water. Natural flooding can result from hurricanes, storms, snowmelt, rain, cresting rivers, and even mudslides.
Fortunately, a separate policy known as flood insurance is specifically designed to cover damage from floods and natural floodwaters. If you live in a flood zone and receive federal funding for your home, including a mortgage, you're most likely required by law to have flood insurance.
Even if you don’t live in a designated high-risk flood zone, getting flood insurance is almost always a wise decision. If you don’t have it, you’ll be on the hook for the full cost of rebuilding your home and replacing your personal belongings after a flood.
If you submit a claim for natural flood damage to your home insurance company, it will be denied. That's why it's critical to ensure you have the right coverage in place before a disaster hits.
What kinds of water damage are covered by homeowners insurance?
You'll need to review your specific home insurance policy with your independent insurance agent to be sure, but it likely includes protection for the following kinds of water damage:
- Collapse from the weight of ice, snow, or sleet
- Frozen and busted pipes
- Accidental overflow from a household appliance or system
- Water damage resulting from vandalism to the home's structure
- Water damage due to ice dams on your roof or in gutters
Instances in which water damage is not covered by home insurance include:
- Gradual water damage, such as water seeping into your home's foundation over time
- Mold and mildew caused by moisture within the home that the homeowner could've prevented
- Water damage to the home due to the failure of the homeowner to maintain upkeep
Be sure to review your policy with the help of your independent insurance agent to be absolutely certain which instances of water damage are covered and excluded by your home insurance.
What Kind of Insurance Covers Flooding?
Congress established the National Flood Insurance Program (NFIP) in 1968 to help property owners financially protect themselves against flood damage. Flood insurance from the NFIP is available to homeowners, renters, condo owners, and business owners in communities that participate in the program.
Some private insurers now also offer flood insurance as a separate policy or as an endorsement to their home insurance policies.
What Does Flood Insurance Cover?
Flood insurance policies cover physical damage to your property and possessions, including the following:
Building Coverage
- The insured building and its foundation
- Electrical and plumbing systems
- Central air conditioning equipment, furnaces, and water heaters
- Refrigerators, cooking stoves, and built-in appliances
- Permanently installed carpeting over unfinished flooring
- Permanently installed paneling, wallboard, bookcases, and cabinets
- Window blinds
- Detached garages
- Debris removal
Contents Coverage
- Clothing, furniture, and electronic equipment
- Curtains
- Portable and window air conditioners
- Portable microwave ovens and portable dishwashers
- Carpets that are not included in building coverage
- Clothes washers and dryers
- Food freezers and the food in them
- Certain valuable items, such as original artwork and furs, up to $2,500
Building coverage and contents coverage must be purchased separately, and always have separate deductibles. If you do not purchase contents coverage, your flood-damaged personal property will not be covered.
How Do I Know If I Need Flood Insurance?
If you live in a flood-prone area or high-risk flood zone, you may already have flood insurance. Flood insurance is a legal requirement for nearly all mortgages and home financing in high-risk flood zones. But if you don’t live in a flood zone, you’ll have to weigh the potential cost and risks to decide if you should buy flood insurance. Some factors to consider are:
- Your location and the likelihood of a flood: Even if you’re not in a flood zone or high-risk area, your home could still be vulnerable, especially if it’s near a river or valley. Most U.S. counties are at risk of flooding at some point. On the other hand, if you’re located on higher ground, like the top of a hill, you may decide your flood risk is too low to warrant buying flood insurance.
- Potential flood damage costs to your property: An expensive home or belongings means it would cost much more to repair or replace your property after a flood. Less expensive property is less risky to leave uninsured because it’s cheaper to replace. The higher your home and contents' values are, the more likely it is that flood insurance is right for you.
- Your savings and ability to cover repairs out-of-pocket: If you have minimal debt and significant savings, you may decide you’d rather save money on flood insurance premiums and take the risk of paying for any repairs yourself if a flood strikes your property. But for most people, replacing their home and belongings at a moment’s notice could be difficult or impossible. Flood insurance safeguards you against such sudden, potentially enormous costs.
If you’re still on the fence about flood insurance, an independent insurance agent can review the pros and cons with you. Flood insurance is often affordable for many homeowners, making it the right decision more often than not.
How Do Flood Zones Work?
Flood zones, technically called Special Flood Hazard Areas (SFHAs), are designated by the Federal Emergency Management Agency (FEMA). You can look up your address on the FEMA Flood Map Service Center website to see a map of flood zones in your area.
Flood zones are areas that have a greater than 1% chance of flooding each year. That’s more than a one-in-100 chance of flooding each year. And while a 2% flood chance may seem tiny, it’s actually quite serious, given the massive financial damage floods can cause.
Just because your home is located outside a flood zone doesn’t mean it will never experience a flood. Having flood insurance in place before a sudden and unexpected disaster occurs in your area is the best defense against what could be otherwise extremely costly flooding and resulting damage to your home and personal belongings.
How Much Does Flood Insurance Cost?
The average annual cost of flood insurance from the NFIP is around $899 per year. Since even a relatively small flood can cause major damage, this premium may be more than worth it to many homeowners.
However, the cost of your policy will vary depending on where you live, your specific area's flood risk, the value of your home and property, and more. If you live somewhere along the coast or in an area with a history of extensive flooding, you can expect flood insurance to be a significant but worthwhile investment.
An independent insurance agent can help you get a quote for flood insurance near you.
How an Independent Insurance Agent Can Help You Get the Best Flood Insurance
When you're looking for flood protection for your home and property, an independent insurance agent can help point you in the right direction. Flood insurance is available from FEMA's National Flood Insurance Program and some private insurance companies. A local independent insurance agent can help provide you with more information about where to find the coverage you need.
Sources
https://www.floodsmart.gov
https://www.fema.gov
https://www.nerdwallet.com/article/insurance/flood-insurance-cost
