Flood insurance protects your home or building and its contents from water damage caused by a flood, which is defined as a temporary condition where two or more acres of normally dry land is submerged by water or mudflow.
Flood insurance is not the same as the basic hazard insurance or a homeowner’s insurance policy because it covers only losses that are due to flooding. The standard homeowner’s insurance covers most other losses, such as fire, wind damage, and falling trees, as long as they are not related to flooding. Homeowners need to buy a separate policy if they want to cover their home and its contents against losses due to flooding.
Flood insurance provides protection for two types of property: the home structure and its contents, but it does not provide protection for the land that your home is built on.
The coverage for your home’s structure includes the foundation, a detached garage (up to 10% of your policy), electrical, plumbing, central air, water heaters, furnaces, built-in appliances, permanent carpets, and built-in bookcases, panels, and cabinets.
The contents of the house that are protected by the flood insurance policy can include things like clothing, furniture, and decorative carpets. They can also cover electronic devices, dishwashers, and washers and dryers.
Flood insurance covers many things but certainly not everything. Here are some circumstances that are not typically covered:
- Damages from movements of the earth triggered by floods
- Damages from mold or mildew that you could have prevented by taking early measures
- Alternate housing while your flooded house is being repaired
- Profits that were lost due to flooding that caused your business to close
- Plants, fences, decks, swimming pools, etc. that were damaged by the flood
- Paper certificates (stock certificates), currency, or precious metals hurt by the flood
- Vehicles damaged by the flood
Federal flood insurance coverage has a cap of $250,000 for the individual building and $100,000 for its contents. Flood insurance policies with lower limits are available, but you cannot purchase anything for higher amounts than the cap imposed by the government.
Flood insurance policies are subject to deductibles, which are separate for the building and the contents. Non-residential buildings and their contents may be covered by higher limits.
Home and building owners can buy national flood insurance issued by the National Flood Insurance Program through the many insurance agencies nationwide.
Home or building owners can also buy flood insurance coverage from private insurers. Make sure that if you go the private route that your policy offers coverage that is least as comprehensive as the flood insurance provided through the federal program.