Home insurance doesn’t cover flood damage, but flood insurance does. Learn how flood insurance protects your house.
Since home insurance does not cover flood damage, flood insurance provides a needed buffer should from floods. Flood insurance covers specific parts of your house, such as the structure, plumbing, and electrical systems. It also covers certain belongings, like your furniture and electronics. Flood insurance can be purchased either through a federal program or some private insurers. This article covers:
Flood insurance covers your home and belongings for repair or replacement in the event of a flood. The National Flood Insurance Program (NFIP) defines a flood as a “general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.”
A standard homeowners insurance policy, also known as an HO-3, does not cover flood damage. You may mistakenly assume that flood damage is covered by your home insurance. This puts you in a dangerous spot if a flood does occur.
Flood insurance can be purchased either directly through the NFIP, or through one of 80 private flood insurers. Of the many flood policies available, a National Flood Insurance Program policy is most relevant to home owners. Coverage is split between structure coverage and contents coverage.
The residential building coverage portion of an NFIP flood policy covers:
The contents coverage portion of NFIP flood insurance covers:
Private flood insurance companies provide similar coverage, just at different pricing. You’ll want to shop around and compare flood insurance quotes and coverage to get the best value.
While flood insurance can cover a lot in the event of flooding, it isn’t full service. Here are common flood insurance exclusions:
Also, flood coverage does not activate until 30 days after purchase. Any flooding to the home during that time period is not covered. There are some possible exceptions to the 30-day wait period:
You can buy flood insurance either through FEMA’s National Flood Insurance Program, or through a licensed private flood insurer. You cannot purchase flood insurance directly through the Federal government.
When purchasing a flood insurance plan through the NFIP, you can call them at the NFIP Referral Call Center. NFIP flood policy rates are the same, regardless of what NFIP-participant you go through. Rates are set by the NFIP. They depend on factors such as when your house was built, market value of the home, and current flood risk.
While not offering it as part of home insurance, there are a number of home insurance providers that also sell flood insurance. Private insurers who provide flood insurance have an advantage over NFIP insurers. Private flood insurers can provide higher claim limits. NFIP flood coverage maxes out at $100,000 for contents coverage and $250,000 for dwelling coverage. NFIP payouts will usually not go beyond those dollar values.
Going with a private flood insurer can have a downside. Private flood insurance companies do have the option of dropping your coverage or not renewing it. This can leave you without flood insurance, should policy issues arise. You can probably get NFIP coverage at that point. However, you’ll still have to deal with the 30 day wait period for coverage to start.
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