Even if your home is not in a flood plain, you can still be at risk of flood damage. Standard homeowner’s insurance does not cover damage caused by floods, including floods from rising bodies of water, overflowing or clogged storm drains, mudslides, and water main breaks. Flood coverage is a specialized form of insurance that protects you from a specific and very real risk: flood water damaging your home.
What is Flood Insurance?
Homeowner’s insurance covers many forms of water damage, but it does not cover damage caused by a flood. Flood damage can be caused by many things:
Overflowing inland waters like a stream, lake, or river or tidal waters
Rapid and unusual accumulation of surface water
Extreme water runoff
Water main breaks
Clogged or failed storm drains
The federally-funded flood coverage program (NFIP) offers two types of policies with up to $250,000 in coverage. If you are taking out a mortgage in a high-risk flood zone, you will likely be required to purchase a flood coverage policy. You can also buy a second or supplemental flood coverage policy that offers better coverage for basements with limits exceeding the federal program guidelines.
Flood Coverage Options
A flood coverage policy can include three types of coverage:
Building coverage that protects your home’s physical structure
Contents coverage that protects your belongings
Replacement cost coverage that reimburses you for the cost of replacing your single-family home
Do You Need Flood Coverage?
Many people assume that they cannot benefit from flood coverage just because they don’t live near a stream or river. The truth is flood damage can also be caused by overdevelopment, backed-up storm drains, high snowpack, and more. According to the National Flood Insurance Program, over 20% of all flood claims come from areas considered low or moderate risk for floods.
Flood coverage is the only type of insurance that will protect you from damaged caused by mudslides and groundwater seepage, which may come from a storm or even a water main break in your neighborhood.
A standard homeowner’s insurance policy will not protect you if you suffer flood water damage. Don’t make the mistake of assuming all water damage is treated the same; get specialized flood coverage if you want protection from the risk of water intrusion into your home.