What is flood insurance and what does it cover?

Flood insurance protects your home and its contents in the event of a flood, but it won’t cover freestanding structures on your property or your car.
Written by Talullah Blanco
Reviewed by Melanie Reiff
Flood insurance protects your home and its contents in the event of a flood, but it won’t cover freestanding structures on your property or your car. 
homeowners’ insurance
policy will protect your home from most natural disasters, but it won’t cover damage caused by a flood. If you live in a high-risk flood area, purchasing flood insurance is the only way to protect your home. 
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What does flood insurance cover? 

Flood insurance covers damages to your property directly caused by flooding. A flood insurance policy will provide two coverages each with its own deductible. They are:

Building coverage

Most of the structural components of your home will be protected by building coverage including:
  • Foundation
  • Anchorage systems and staircases
  • Electrical and plumbing systems
  • Furnaces and water heaters
  • Central air systems
  • Refrigerators, stoves, and built-in appliances
  • Permanently installed carpeting, cabinets, paneling, and bookcases
  • Solar energy equipment

Contents coverage

A flood insurance policy offers coverage for your personal belongings and other content inside of your home including:
  • Personal belongings such as clothes, furniture, and electronics
  • Washers and dryer
  • Dishwashers
  • Portable and window air conditions
  • Microwave oven
  • Carpets not included under building coverage
  • Valuables up to $2,500
Each category in contents coverage has an estimated value and coverage limit. If the contents of your home exceed the coverage limit in a content category, you’ll want to purchase additional protection. 
Key Takeaway: Flood insurance covers two types of property: the structure of your home and your belongings inside of it. 

What doesn’t flood insurance cover?

While a flood insurance policy covers the essential components of your home and your belongings, a list of exclusions applies.
The following instances and items aren’t protected by building or contents coverage:
  • Preventable water damage not attributable to the flood, such as moisture, mildew, or mold
  • Damage caused by earth movement
  • Temporary housing and any additional living expenses you incur while your home is being repaired 
  • Currency, precious metals, and stock certificates or bonds
  • Most self-propelled vehicles and their parts
  • Personal belongings stored in the basement
  • Property outside of your insured home, such as patios, decks, fences, landscaping, septic systems, seawalls, hot tubs, and swimming pools
Flood insurance will not cover damages past the policy coverage limit. Federal flood insurance coverage is capped at $250,000 per building and $100,000 for contents, while private flood insurance policy offers higher coverage limits. 
Key Takeaway: The building and content coverage limit should be reflective of the value of your property and its contents. 

When do you need flood insurance?

The risk of flooding in your area will determine whether you’ll be required by the government and mortgage lenders to purchase flood insurance. The Federal Emergency Management Agency developed three flood zones to categorize the risk of flooding in an area. 
  • Special Flood Hazard Areas (SFHAs) are high-risk. These areas have a 25% chance of flooding at least once within 30 years. Coastal regions, stretches of the Mississippi River, and areas near the Rockies are often categorized as SFHAs. If you live in one of these areas, you’ll be required by the federal government or mortgage lender to purchase flood insurance. 
  • Moderate-to-low risk. Flooding in these areas is far less likely than that in high-risk flood zones, and flood insurance is not required but still recommended by the federal government. 
  • Undetermined risk. These areas have not been analyzed for the degree of flood risk, but they are not without the risk of flooding. 
Check FEMA’s Flood Insurance Rate Maps online to see if you reside in a flood zone and need flood insurance. Just enter your zip code or address into the map portal. You’re in a high-risk flood zone if your home is located in an area labeled Zone A or Zone V, and you will have to purchase flood insurance. 
Key Takeaway: Flood insurance is required in high-risk flood zones, but should be purchased in moderate-to-low-risk zones as well. 

Flood risk factors to consider

Even if you aren’t required to purchase flood insurance by the government or mortgage lenders, flood insurance is the only way to protect your home from flood damage. 
Here are some of the factors you should consider when assessing the flood risk in your area:
  • Lake, river, and stream overflow. Heavy rain and melting snow can cause overflow. If you live near a body of water, your home may be at risk of flooding. 
  • Dam failure. Your home could be at risk of flooding if you live downstream from a dam and it fails. 
  • New development. Lack of trees and vegetation in rapidly developing areas change the natural drainage of water and can cause flooding. 

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Flood insurance covers damage that is directly caused by flooding. However, basements, separate structures, and some belongings—like cars or precious metals—are not covered under flood insurance.
Residents of Special Flood Hazard Areas are required to have flood insurance. Those in moderate-risk zones also will want to consider the additional protection.
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