Flood Insurance – What it is and How it Works

Are you among those homeowners who think they don’t need flood insurance? A lot of homeowners feel there is no need for them to buy this insurance. According to the National Association of Insurance Commissioners, only about 5% to 15% of homeowners have it. But according to the most recent data from FEMA, close to 99% of counties in the U.S. are stuck by flooding.

Flood Insurance - What it is and How it Works

To worsen the case, many homeowners thought they were already covered for flood damage by their homeowner’s policy. But with a standard homeowner’s insurance policy, there is no coverage for flood damage. If you don’t have flood insurance, you could face a major financial problem if your home gets flooded. This article

What is Flood Insurance?

Flood insurance is a type of property insurance that covers any losses or damages that are sustained by water damage through flooding. Also, this insurance policy covers your house and your belongings for any kind of flood damage. A flood is a major event, and any damage or devastation it causes is uncovered if you do not have supplemental coverage.

How Does it Work?

This insurance works just the same way as other insurance policies. So far, you have made the payment for your insurance premiums; the company will be responsible for the coverage of any flood damages. Its policies are offered for all homes and commercial properties.

Standard homeowner’s insurance is responsible for the coverage of all interior water damage because of factors such as storms or burst pipes. Homeowners who live in a flood zone are usually those who need to get special insurance.

What Does It Cover?

This coverage is divided into two parts, which are the dwelling and contents. Dwelling coverage covers your house, while content coverage covers your belongings. It is 100% possible for you to buy a dwelling policy only, a content policy only, or even both of them.

Dwelling Coverage

Dwelling coverage assists you in paying for the rebuilding or repair of the building of your house if it has been damaged by flooding. If there is flood damage to your electricity, this coverage will pay to repair or replace the electricity.

Contents Coverage

Meanwhile, Contents coverage is responsible for the coverage of your belongings, including clothing, furniture, and appliances. It is also known as personal property coverage. If there is a flood in your building and it damages your living room furniture, this coverage will pay to repair or replace that furniture.

Food Insurance Basics

CoverageFEMA flood insurance policy
Dwelling coverage limit$250,000
Content coverage limit$100,000
Building and contents coverage deductible choicesFrom $1,000 each (no discount) to $10,000 each (40% discount)
Waiting period for coverage after you buy (there are some exceptions)30 days
Loss of useNone

What Doesn’t Flood Insurance Cover?

Do you know that flood insurance does not cover all water damage? A flood policy does not cover the following damage:

  • Damaged cars.
  • Also, Preventable mold.
  • Damage caused by burst pipes.
  • Personal property that is not in your building includes decks, swimming pools, septic systems, patios, and landscaping.

In addition, it does not cover additional living expenses, like hotel lodging, if your home is inhabitable.

How To Get Flood Insurance

Are you now interested in this insurance but don’t know how to get it? This unit will assist you in that. There are two ways that you can get this insurance, which are:

The National Flood Insurance Program (NFIP)

This is the federal plan from the Federal Emergency Management Agency. In addition, a lot of homeowners with this insurance get it from the National Flood Insurance Program. Your home insurance agent can assist you in processing your application for a policy.

Private Personal Flood Insurance

This is accessible to some companies. They may not have coverage options from the Federal Emergency Management Agency, so they are the best choice for those who have large or expensive properties or who see the Federal Emergency Management Agency choices as insufficient.

Unfortunately, if your building has once had flood damage or you live in a flood area, your choice will be limited to a Federal Emergency Management Agency policy.

Frequently Asked Questions

Does the Homeowner’s Insurance Cover Flood Damage?

No, a standard home insurance policy doesn’t have coverage for flood damage. In addition, a homeowner’s policy has coverage for water damage from unexpected and accidental problems like a burst water pipe.

How Much Does It Cost?

The average homeowner’s insurance premium is roughly $700 a year, according to the Federal Emergency Management Agency (FEMA). Also, premiums for this insurance differ depending on your risk level for a flood loss, the type of coverage you need, the amount of coverage you choose, and your deductible.

What Should I Do if My Property is Damaged Due to a Flood?

The first step for you to take to start the claim process is to file a claim with your insurance agent or company if you have this insurance policy. You can see the guidelines for filing a claim after a loss on any flood insurance company website. The insurance company will send a claim agent out to evaluate the damages and assess if they are covered by the policy.