What Does Flood Insurance Cover?

Image of water coming up a driveway in from of a light tan house

Flood insurance covers your home's structure and your property if they're damaged by floodwaters. While it’s something you hope you never have to use, but you’ll be grateful to have it when you need it! After all, water can cause a lot of damage very quickly, and the repairs can be costly. And even if you don’t live in a high-risk area, you still need to keep flooding on your radar.

If the worst happens, you shouldn’t have to worry about getting your home back to normal. That’s what insurance companies are for! However, it’s important to understand that flood insurance isn’t included in a traditional homeowners insurance policy. For this coverage, you’ll need a separate endorsement through the National Flood Insurance Program. Some private insurance companies offer this coverage as well, though the government sets coverage and price rates.

Key takeaways:

  • Flood insurance provides financial protection for your home’s structure and your personal property if they’re damaged by flood waters.
  • Any floods not caused by external forces (severe weather, natural disasters) won’t be covered with traditional home insurance.
  • The federal government regulates prices for flood coverage: up to $250,00 for residential homes and $100,000 for residential contents.

Flood insurance coverage 101

Flood insurance covers your home’s structure (often called building coverage) and your personal property (called contents coverage) if they’re damaged by flood waters. Some policies even offer financial assistance for loss of use, so that your family has a place to stay if your home becomes uninhabitable. This includes repair and replacement costs for a variety of items such as:

Building Coverage

  • Baseboards
  • Blinds
  • Electrical systems
  • Flooring
  • HVAC systems
  • Plumbing
  • Walls

Contents Coverage

  • Appliances
  • Clothes
  • Curtains
  • Food
  • Furniture
  • Technology
  • Valuables (up to your individual policy limit)

The coverage limits and deductibles that your policy provides is dependent on your flood insurance risk. When purchasing your home, you likely got a flood determination zone report that showed just how likely your home is to be flooded. Don’t know what zone you’re in? Check out the flood maps provided by the Federal Emergency Management Agency (FEMA).

If you are in a high-risk flood zone (such as near the coast, in a flood plain or near a large body of water) you’ll need to get a standard risk policy. Those in a lower-risk zone who aren’t likely to deal with flooding can purchase a preferred risk policy at a lower price. Either way, the coverage remains the same!

What does flood insurance not cover?

Flood insurance, while comprehensive in terms of financial coverage, does have its limitations. Any floods not caused by external forces won’t be covered, so if a pipe bursts or your water heater malfunctions and floods part of your home, you’ll be responsible for paying for the damage. However, if the burst pipe or other malfunction is caused by flooding from a storm, your flood insurance policy will kick in and cover the costs. 

Flood insurance coverage also has other restrictions that are important to be aware of. Any outside landscaping or external structures that are damaged during a flood won’t be covered. Your basement, though part of your home, doesn’t have the same level of protection as the rest of the house. Through your contents coverage, all the belongings in the basement are included, but the walls and flooring aren’t.

Do I need flood insurance?

So how do you know when you need flood insurance? In some states, you’ll be required to get coverage through the national flood insurance program (NFIP). This is most common if you live on the coast, in a flood plain or in an area where hurricanes are common (though you’ll also need hurricane insurance if that’s the case).

Even if you aren’t federally required to buy flood insurance, you’ll still want to consider adding this endorsement to your home insurance policy. After all, it only takes a big rainstorm to bring a few inches of harmful water into your home or basement. You might even be able to get a discount on your policy for adding on this endorsement, as it lowers the risk for insurers/lenders and helps prevent widespread material shortages in the event of a natural disaster. 

How much is flood insurance?

The federal government regulates prices for flood coverage, up to $250,00 for residential homes and $100,000 for residential contents (according to the NFIP). They determine how much individual companies are allowed to charge you, meaning you don’t have to worry about shopping around to get the best deal. The average cost for out-of-pocket expenses, however, is determined by a variety of factors including policy limits, the value of your home/belongings and your home’s location.

How do I get flood insurance?

Coverage for flood damage through these policies are not retroactive. In fact, most policies usually take 15 to 30 days to kick in. This means you’ll need to sign up for protection well before a storm comes your way. 

You have two options when purchasing a policy: buying directly from the government or through a private insurer. Though the price is fixed, the amount of time it takes to start receiving coverage is generally shorter through a private flood insurance company.

Don’t lose any sleep over potential damage to your home from water damage or other catastrophes. With a flood insurance policy endorsement, you can protect your home and belongings in one easy step. And if you need help along the way, that’s what we’re here for!