What does flood insurance cover?

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Most homeowners’ insurance policies do not cover floods. You will need to purchase a separate flood insurance if you want flood protection. (Shutterstock)

Although homeowners insurance is a valuable tool to protect your home and belongings from disasters and accidents, it does not cover everything. Most standard home insurance policies do not include flood cover.

Even if you do not live in an area at high risk of flooding, it may be wise to get flood insurance, as floods can occur anywhere. Over 40% of flood claims received by the National Flood Insurance Program between 2015 and 2019 come from regions with low to moderate flood risk, according to FEMA.

Here’s what you need to know about flood insurance and what it covers.

With Credible you can easily compare flood insurance offers from leading insurance companies.

What is flood insurance?

Although floods are the most common and costly natural disasters faced by homeowners, most homeowners insurance policies do not cover flood damage. You will need to purchase a separate flood insurance policy in addition to yours homeowners insurance policy to protect your home from water damage from floods.

You can buy flood insurance through National Flood Insurance Program (NFIP) or directly from a private insurer.

With a flood insurance policy, your insurance carrier will cover the cost of repairing or rebuilding your home (after you pay your deductible) and will pay you the actual monetary value for your damaged personal belongings. If you purchase a policy from a private insurance company, you may be able to cover your personal property at a replacement price that is not deductible for depreciation.

What does flood insurance cover?

With a private flood insurance company, your coverage may vary depending on the provider. The NFIP Standard Flood Insurance Policy Form offers two types of flood insurance coverage:

  • Construction property – This flood insurance policy covers the physical structure of your home up to $ 250,000, including the following: electrical and plumbing systems, stoves, water heaters, appliances, permanently installed features such as carpets, cabinets and bookcases, blinds and debris removal.
  • Personal property – This type of NFIP flood insurance covers items in your home up to $ 100,000, including furniture, clothing, electronics, microwave, washing machine, dryer, curtains, portable air conditioners and air conditioners for windows, carpets and valuable works of art and leather (up to $ 2,500) .

It is important to note that if you want to cover both your home and your belongings, you need to purchase both types of coverage.


What excludes flood insurance?

Whether you buy flood insurance privately or through NFIP, your flood insurance policy usually only covers damage caused directly by floods. For example, your policy probably does not cover the financial losses you suffer from not being able to run your home business.

Other general exceptions to flood insurance policies include:

  • Housing and extra living expenses while your home is uninhabitable
  • Every property outside your home, including swimming pools, landscaping, wells, decks, patios and fences
  • Currency, precious metals or securities
  • Cars, tractors, motorcycles and other self – propelled vehicles

Visit Credible to compare quotes for flood insurance from various insurance companies.

Does the flood insurance cover the basement?

Flood insurance provides little or no coverage for crawl spaces and basements. NFIP defines a basement as any room with four walls below ground level. According to this definition, a sunken living room or walk-in area can be considered a basement.

A standard flood insurance policy (SFIP) covers cleaning costs, such as pumping water from floods and treating mold and mildew. SFIP also provides specific items attached to your home and personal belongings connected to a power source. The elements covered by this policy include:

  • Furnaces, boilers and air conditioners
  • Fuel tanks
  • Crankcase pumps, heat pumps and water tanks
  • Electrical assemblies, circuit breaker boxes, sockets and switches
  • Elevators and services
  • Attached stairs and staircases
  • Basic supporting elements

Remember that flood insurance does not usually cover personal belongings in your basement unless they are connected to a power source. For example, it usually does not cover furniture, clothing and generators in your basement. If you are unsure of the coverage of your policy, talk to your agent about exceptions and limitations to make a more informed decision.


When is flood insurance needed?

If you are buying a home in a high-risk area and have a government-backed mortgage, your lender will require you to purchase flood insurance to comply with federal regulations. Even if you live in a lower risk area, your lender may still require you to carry an additional flood insurance policy to protect your loan collateral.

FEMA defines areas at high risk of floods as areas with at least a 1% chance of flooding per year. These areas are called areas of special flood risk and have at least a 25% chance of flooding during a standard 30-year mortgage period. FEMA manages and updates Flood tariff maps (COMPANIES) and makes them available to the public. These maps assess the risk and determine the likelihood of flooding in your area.

Whether your lender requires it or not, buying flood insurance can be worth considering to protect your financial investment in your home. One inch of water in your home can cause $ 25,000 in damage, according to FEMA.

What is the average cost of flood insurance?

The average cost of an NFIP insurance policy is approximately $ 700 per year, but you may be able to purchase a policy for less than $ 500 per year if you live in an area with a moderate or low risk of flooding.

As with any type of insurance, yours premium insurance will depend on your risk. Factors that could affect your annual flood insurance premiums include:

  • Flood zone
  • Location, design and age of your home
  • Type of flood cover (building and / or contents cover)
  • Coverage and deduction

NFIP issues most flood insurance policies. You can visit Website of the National Flood Insurance Program to see the participating insurance carriers where you live.

You can too compare quotes for flood insurance free with Credible.

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