As a homeowner, it’s important to understand the difference between flood insurance and homeowner insurance. Standard homeowner insurance excludes damage from rising water, such as floods, storm surges, and rain runoff. Sudden water damage—like a burst pipe, leaking roof, or overflowing toilet—should be covered under your standard insurance policy.
You might wonder, what is a flood? According to FEMA, a flood is an excess of water on land that is normally dry. Water damage to your home from a river that overflowed into nearby streets and yards would be a result of flooding.
Floods happen everywhere. One of the biggest misconceptions about flood insurance is the idea that you won’t need it if your home is in a moderate- to low-risk area; however, floods are unpredictable and FEMA reports more than 40 percent of the claims it handles is in moderate- to low-risk areas.
So, what does flood insurance cover? The National Flood Insurance Program (NFIP) offers two types of coverage. Building coverage protects your home’s structure and utilities. Contents coverage protects personal belongings and appliances. Coverage through the NFIP covers up to $250,000 for the building and $100,000 for contents. There is typically a 30-day waiting period for new flood insurance policies to take effect so it’s imperative to think through your purchase and plan accordingly.
Flood insurance can be purchased through your insurance provider but it’s important to understand what’s not covered by flood insurance. According to the NFIP there are several things not covered by flood insurance: vehicles (usually covered by auto insurance), outdoor entities (fences, pools, spas, septic systems, landscaping, etc.), temporary housing, currency (precious metals, paper valuables, stock certificates), and moisture or mold/mildew damage that is due to neglect.
If you have specific concerns—such as a basement, washer and dryer, or furnace—speak directly with your insurance agent to familiarize yourself with the coverage you have or should purchase.
