Flood losses are not covered by your homeowner’s policy. This is a common misconception that homeowner’s insurance covers flood damages.
Congress established the National Flood Insurance Program (NFIP) in 1968 as a way to provide protection to consumers. While your agent can write a flood policy on your behalf, all flood policies are written through the NFIP.
The following statistics are provided by F.E.M.A.
Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire. About 25% of all flood claims are for policies in low- to moderate-risk communities. Since 1978, over $31 billion for flood insurance claims and related costs have been paid.
Over 5 million people currently hold flood insurance policies in more than 20,000 communities across the U.S.
A “flood” as described by the NFIP is simply â€œan excess of water on land that is normally dry.
You don’t have to live near a river or ocean to be at risk for a flood. The most common type flood occurs from a flash flood, which can strike anywhere at any time when a large volume of rain falls within a short time. Even a couple inches of rain can cause your home to suffer flood damage.
A standard flood policy will cover structural damage, furnace, water heater and air conditioner, flood debris clean up, and floor surfaces. You can usually buy added coverage for furniture and other items.
If you live in an area considered a high-risk area, federal law requires you to purchase flood insurance. Typically, your mortgage company will inform you during the closing process or your real estate agent during the purchase process if your home is in a flood zone.
A homeowner can cover their home for up to $250,000 and contents for $100,000. A renter can cover their belongings up to $100,000.