Does Homeowners Insurance Cover A Flood?
There is a lot of confusion regarding what is covered with a homeowner’s policy in relation to flood insurance. So we spoke with insurance expert Chris Huebener to help you understand what flood insurance is and if you need a flood policy.
What is considered a flood?
First, let’s define flooding. In the insurance world, a flood is defined as natural, rising water. So, if water is coming up your driveway into your home, that’s a flood. But if you have a pipe burst inside your house, that’s not a flood.
Does a homeowners insurance policy cover a flood?
No, your homeowners policy will not cover a flood. Only flood insurance will. Even if a hurricane comes through and blows your roof off, your homeowners policy will cover your roof, but not flood damage from water getting into your house through your missing roof or a storm surge.
Who needs flood insurance?
FEMA maps out certain flood zones and defines areas as high or low risk for flooding. However, even in the low risk areas, one out of four homes will experience a flood at some point.
Flooding happens everywhere and it is often due to storms. So when assessing your flood risk, it’s important to look at all areas of risk, not just whether you’re in a technical flood zone.
Is flood insurance worth the cost?
It’s important to talk to an agent about your specific property to get an idea of the rates for a flood insurance policy. However, the average cost of flood damage is around $50,000. So, if your flood insurance policy premium is $500, that’s absolutely worth it to cover $50,000 of damage.
The important thing is to understand your risk and understand the potential costs of a flood. Then you can determine whether you’d be okay paying for that damage.
Differences between homeowners insurance and flood insurance
Homeowners insurance and flood insurance serve different purposes and provide coverage for different types of risks:
-
Homeowners Insurance:
- Homeowners insurance typically covers damage to your home and personal belongings caused by perils such as fire, lightning, windstorms, theft, vandalism, and certain types of water damage (e.g., burst pipes).
- It provides coverage for the structure of your home (dwelling coverage), personal property (contents coverage), liability protection, and additional living expenses if your home becomes uninhabitable due to a covered loss.
- Homeowners insurance does not typically cover damage caused by flooding. While it may cover water damage from a burst pipe inside your home, it usually does not cover damage from external flooding, such as overflowing rivers, heavy rains, storm surges, or tidal waves.
-
Flood Insurance:
- Flood insurance specifically covers damage to your home and personal property caused by flooding, including rising water from sources such as rivers, lakes, oceans, or excessive rainfall.
- It is typically purchased as a separate policy from homeowners insurance and is available through the National Flood Insurance Program (NFIP) or private insurers.
- Flood insurance covers both the structure of your home and its contents, providing financial protection against flood-related losses.
- Depending on your location and flood risk, flood insurance may be required by lenders if you have a mortgage on a property located in a high-risk flood zone designated by FEMA (Federal Emergency Management Agency).
In summary, while homeowners insurance provides coverage for a wide range of perils, it typically excludes coverage for flood damage. Flood insurance is specifically designed to fill this gap, offering protection against losses caused by flooding, which is not covered by standard homeowners insurance policies. It’s important for homeowners and renters in flood-prone areas to consider purchasing flood insurance to ensure they have adequate financial protection in the event of a flood-related disaster.