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Most standard homeowners insurance policies don’t include flood insurance. But floods can happen almost anywhere, according to the Federal Emergency Management Agency (FEMA).

Certain areas are designated flood zones, such as areas near rivers or coastal areas. Flood maps can tell you whether your community has a high risk of flooding. But floods can also happen in low-risk areas from heavy rains and poor drainage. With that in mind, it makes sense to look into flood insurance.

Here’s what you need to know about flood insurance, and whether or not you need it:

What is flood insurance?

Flood insurance is usually an add-on to your standard home insurance policy. It covers losses to your home and belongings that are directly caused by a flood, which is “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties,” according to FEMA.

For example, your flood insurance might cover damage caused by a sewer backup, but only if that sewer backup is a result of a flood. If something other than a flood caused the sewer backup, flood insurance wouldn’t cover the damage.

What does flood insurance cover?

Flood insurance covers damage from floodwater to buildings such as your home or office, the contents within those buildings, or both.

You can purchase flood insurance from a government program called the National Flood Insurance Program (NFIP). The NFIP’s Standard Flood Insurance Dwelling Form offers two types of flood insurance coverages:

  • Building Property: This type of flood insurance protects the structure of your home, electrical and plumbing systems, furnace, water heater, refrigerator, stove, built-in appliances, wall-to-wall carpeting, built-in features like cabinets and bookcases, window blinds and shutters, foundation walls, staircases, detached garages, and debris removal.
  • Personal Property (Contents): This type of flood insurance protects the contents within the building, such as clothing, furniture, electronic equipment, curtains, portable appliances, area rugs, and valuables like artwork (up to $2,500).

What doesn’t flood insurance cover?

While the NFIP offers up to $250,000 for Building Property coverage and $100,000 for Personal Property coverage, it has several exclusions. Even if you purchase higher coverage from a private insurer, flood insurance typically doesn’t cover:

  • Damage caused by earth moving, even if the flood caused the movement
  • Additional living expenses, such as temporary housing while your home is unlivable
  • Financial loss due to interruption of your business
  • Anything outside of the insured home, like decks, walkways, patios, fences, and seawalls
  • Swimming pools and hot tubs
  • Trees and plants
  • Wells and septic systems
  • Currency, valuable papers like stock certificates, and precious metals
  • Mold, mildew, or moisture damage that could have been avoided
  • Cars, other types of self-propelled vehicles, and vehicle parts

Learn More: What Does Homeowners Insurance Cover?

Does flood insurance cover the basement?

The NFIP defines the basement as an area of a building that’s below ground level on all sides. For this reason, it might classify an area of your home or building as a basement that you don’t consider to be a basement, such as a sunken living room or crawlspace.

Basement coverage after a flood is limited. To be covered, items in the basement need to be connected to a power source or installed. Cleanup expenses such as pumping out trapped floodwater and treatment for mold or mildew can be included.

Some examples of covered items include:

  • Central air conditioner
  • Furnace
  • Fuel tanks
  • Water heater
  • Heap pump
  • Electrical outlets
  • Elevator
  • Drywall
  • Circuit breaker box
  • Stairway
  • Foundation elements

If you purchase contents coverage separately, your personal property will also be covered from damage caused directly by a flood, as long as it’s connected to a power source. Anything that’s simply stored in your basement won’t be covered.

Covered personal property items include:

  • Washer and dryer
  • Air conditioning units
  • Food freezers (except walk-in freezers) and the food inside

It’s important to note that if an item isn’t listed in your flood insurance policy, it’s not covered. Items that are typically excluded are:

  • Improvements you might have made to finish the basement, such as bathroom fixtures
  • Personal property such as a couch
  • Generators
  • Dehumidifiers that aren’t integral to your heating and air conditioning system

Do you need flood insurance?

If you live in a high-risk flood area and you have a government-backed mortgage, your lender will require that you have flood insurance. That’s because if you live in a high-risk area, you have a one-in-four chance of being in a flood at some point during your 30-year mortgage. Every community has a flood map that shows your area’s risk of flooding — refer to this often, as flood risk can change over time.

Even if you aren’t required to buy flood insurance, you might want to if your area experiences a lot of rain or inclement weather. An inch of water in your home can cost you $25,000 in damage, according to FEMA. And remember: Your homeowners insurance policy probably doesn’t cover damage caused by a flood.

If you aren’t in a high-risk area, your dwelling could still suffer flood damage from a poor drainage system and a bad storm, melting snow, new construction in the area, or a broken water main. Between 2014 and 2018, over 40% of NFIP flood insurance claims came from policyholders outside high-risk flood areas, according to FEMA.

Good to know: If you rent, your landlord is typically responsible for insuring the building but not your personal property. To insure your personal belongings in the event of a flood, you would need to buy renters flood insurance coverage — this is separate from renters insurance.

Check Out: How Much Homeowners Insurance Do I Need?

How much does flood insurance cost?

The cost of flood insurance varies depending on several factors, including:

  • Your location
  • Your home’s age and design
  • Your flood risk
  • Your type of coverage (building, contents, or both)
  • Your deductible
  • The amount of coverage you buy

You can purchase flood insurance from the federal government through the NFIP or through private providers.

Some private insurance carriers that offer flood insurance include:

  • Zurich Insurance Group
  • Assurant
  • American International Group (AIG)
  • AXA
  • Swiss Re Ltd.
  • Berkshire Hathaway Inc.
  • Liberty Mutual
  • Allstate

When should you purchase flood insurance?

The best time to buy flood insurance is when you purchase a home, particularly if the home is in a flood zone.

You might also want to buy flood insurance if your community experienced a changing weather pattern that raised your flood designation from low to high. Or maybe new construction now causes water to run off toward your house, increasing your flood risk.

Good to know: It’s important to keep up with FEMA’s flood maps, so you’re aware of your flood risk.

How to purchase flood insurance

Follow these steps to buy a flood insurance policy:

  • Find out if your community participates in the NFIP. You must live in a participating community to buy NFIP flood insurance. Over 24,000 communities participate in the program. You can find out if your community participates on FEMA’s website.
  • Contact your insurance agent. Your insurance agent can write a policy for you through the NFIP. If you don’t have an insurance agent that can provide flood insurance, you can use the NFIP’s flood insurance provider tool to find a provider near you. You can also contact one of the private insurers that provide flood insurance to get a policy directly through one of those providers.
  • Submit your payment. If you purchased flood insurance through the NFIP, you’ll pay the insurance premiums through your insurance agent. If you purchased a flood policy from an insurance carrier, you can typically pay your premium online or by mail. In addition, homeowners may pay through an escrow account, a separate account with your mortgage lender.
  • Wait for the policy to go into effect. It typically takes 30 days for NFIP flood insurance to go into effect. You might need to wait less time if you go through a private insurer, but either way, be aware of your waiting period.

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About the author
Laura Agadoni
Laura Agadoni

Laura Agadoni, author of “New Home Journal: Record All the Repairs, Upgrades and Home Improvements During Your Years at…,” is a real estate writer, landlord, and REALTOR®.

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