Floods are the number one natural disaster in the United States. Even small streams, gullies, creeks, culverts, dry streambeds or low-lying ground that appear harmless in dry weather can flood. Just a single inch of water from flooding can cause thousands of dollars in damage to your home. Here’s what you need to know about insuring against flood damage.
A standard homeowners policy does not cover damages from flooding. So how can you protect yourself against the financial disaster that flooding can cause? The answer is flood insurance.
Flood insurance is only available through the National Flood Insurance Program (NFIP). To make sure you get a fair price, every flood agent answers to this government agency; therefore, flood insurance is backed by the government but sold through private insurers. You’re eligible to purchase flood insurance as long as your community participates in the NFIP. Visit www.floodsmart.gov, the official website of the NFIP, to map out which zone your home falls in.
Mortgage lenders require you to buy flood insurance if you live in a high-risk flood zone. However, those who live in high-risk flood zones are not the only people who need flood insurance. In fact, nearly 20% of flood insurance claims come from moderate-to-low risk areas.
Please note: Unlike homeowners insurance, flood insurance has a 30-day waiting period before coverage goes into effect. So, if the weather forecast announces a flood alert for your area and you want to purchase coverage, it’s already too late. You will not be insured if you buy a policy a few days before a flood. However, if your lender requires flood insurance in connection with the making, increasing, extending or renewing of your loan, there is no waiting period.
What does flood insurance cover?
- Flood damage to your home’s structure, including damage to the furnace, water heater, air conditioner, etc.
- Flood damage to your furniture, rugs, appliances, and clothing.
- Expenses you incur to protect your home against imminent flood damage by sandbagging or other measures.
- Clean-up costs including debris removal
Cost of Coverage
Flood insurance premiums are based on several factors, which could loser or raise the amount you pay. These factors include:
- Age of home
- Amount of building and contents coverage