It doesn’t take much water to seriously damage your home. And the damage typically isn’t covered by standard homeowners insurance. You may need to have a separate flood insurance policy offered through FEMA by the National Flood Insurance Program, which provides federally backed protection against flood losses.
Who Needs Flood Coverage
If you live in a high-risk flood zone, you're required to have coverage by your lender. If you're in a low to moderate risk area, coverage is typically optional. FEMA determines which areas of the country are high risk. Lenders normally require flood insurance when you buy a home inside a 100-year flood plain.
What it Covers
Homeowners insurance will normally protect you from water damage due to burst pipes, but not due to flooding from a natural disaster. Flood insurance pays for damages to your:
- Structure of your home
- Garages, both attached and detached
- Major appliances, such as dishwashers, stoves and refrigerators
- Plumbing and electrical fixtures
- Furniture and clothing (with additional personal property coverage)
If your home has a basement, flood insurance covers the structure and basic items, such as the foundation, unfinished drywall, most utility connections and appliances. However, it doesn't cover improvements, such as finished drywall or personal belongings stored there.
Choosing the Right Amount of Coverage
There are a lot of factors involved in determining how much coverage you'll need.
- Flood risk
- Value of home
- Cost to rebuild your home
- Value of assets
Is Your Home Flood Prone?
Some areas are more likely to flood, but it can happen to anyone. However, houses in a 100-year flood plain have a 1% chance of flooding each year and a 26% chance during the period of a 30-year mortgage. For flood maps, flood hazard data and more general information, visit the FEMA website.
How to Decide on Your Deducible
Like your car or homeowners insurance, a higher deductible will lower your premium, but also reduce your claim payment. You can usually choose different deductibles for your home and personal property. The deductibles will apply separately to building property and personal property claims.
Waiting Period for Coverage
There is typically a 30-day wait period from the date of purchase before a flood policy takes effect.