Floods are the number one natural disaster in America, and they account for 90 percent of every natural disaster in the country. Floods cause $50 billion in economic damage each year, and as little as one inch of floodwater can cause $21,000 in damage.
Flooding is one of the risks you will face as a homeowner. Unfortunately, your homeowner’s insurance policy does not cover loss or damages caused by natural flooding. Therefore, you need to get a separate flood insurance policy.
Flood insurance provides you with coverage for your home and property for damages caused by naturally occurring floodwaters. The most common causes of floodwaters include hurricanes, winter storms, and melting snow. Insurance companies typically define a flood as water covering at least two acres of normally dry land. Flood insurance does not cover water damage caused by breaks in the water pipes in your home or on your property. It also does not cover damages caused by breaks in municipal water pipes.
Flood insurance covers damages to your home or the loss of your home. It also covers the loss or damages to your personal belongings. If you lose your home, your flood policy will pay to replace your home up to a certain limit. This limit may not be equal to or greater than the value of your home. You will need to talk to your insurance agent to see if your flood policy will pay the full value of your home if you lose your home in a flood.
You are not mandated by law to have flood insurance. Your lender may require you to have flood insurance as a condition of obtaining a mortgage, especially if you live in an area that has a high risk of flooding.
Private insurance companies do not offer flood insurance. You can only buy a flood policy through FEMA’s National Flood Insurance Program. Talk to your insurance agent to see if they participate in the NFIP. Only the agents who participate in the NFIP can offer flood insurance. If your agent participates in this program, then they can help you get the right type of flood insurance that meets your needs.