What Is Flood Insurance And Do You Need It?

Depending on where you live, you may have had your mortgage company ask whether you have a flood insurance policy or not. If so, you're probably asking yourself "Wait, doesn't my homeowners insurance policy cover flooding? Why do I need a separate policy?" While most homeowners insurance policies may cover water damage, most may not cover damage caused by a flood, especially if you live in a higher-risk flood zone.

What is a flood?

For insurance purposes, a flood may be defined as a temporary excess amount of water covering at least two acres of land that is typically dry. While floods aren’t always catastrophic events, they can occur almost anywhere, as opposed to natural disasters such as hurricanes that usually only affect a specific region.

Why is flood coverage excluded in my homeowners insurance policy?

Floods are incredibly common disasters, especially if you live in an area near a body of water, though as stated before they can occur almost anywhere, often without warning. They also tend to be quite expensive. According to FEMA, one inch of floodwater can cause up to $25,000 in damages, far more than the average homeowners insurance claim. If all homeowners insurance companies included flood in all of their policies, it would cause rates to increase substantially for everyone, not just people that live in high-risk flood zones.

How do I get a flood insurance policy?

The simplest way to obtain a flood insurance policy is to contact your homeowners insurance agent and request a quote for a standalone flood policy. If your agent is unable to write flood, however, you can contact the National Flood Insurance Program for help finding an insurance provider. You can reach them at 877-336-2627, or go to FloodSmart.gov. It is important to note that there is typically a waiting period of 30 days for flood policies through the NFIP to go into effect, so it is imperative that you plan accordingly when shopping for a quote.

What is covered under my flood policy?

Much like your homeowners insurance policy, flood policies can vary depending on the company. Typically, flood insurance policies cover your home’s structure and the contents inside in the instance of a flood. In most cases, the coverage for the structure itself is insured at replacement cost, while your personal property may be insured for the actual cash value of the item. This means that damages to the home may be covered for up to what it would cost to fully replace the structure, whereas the items inside may be covered for what they are currently worth after depreciation. For example, if your TV is damaged, it might cost $800 for a replacement, but the TV itself may only be worth $500, in which case the policy may only pay out $500 in the event of a flood claim. Additionally, your flood policy may cover the cost of debris removal, if needed.

What isn't covered by my flood insurance policy?

Again, while the specifics of each policy vary, there are some things that are typically excluded from flood policies. These include motor vehicles, property outside of the insured structure, and damage from sewer line backups.

Much like how vehicles are usually not covered by homeowners policies, flood insurance doesn’t extend to them either. Any damage caused to automobiles, ATVs, motorcycles, etc. would fall under your auto or vehicle insurance.

Your flood policy may also exclude property outside of the insured structure, such as landscaping, pools, hot tubs, fences, etc.

Finally, damage caused by a sewer backup not directly linked to a flood would not be covered by a flood policy, though you may be able to file it as a water damage claim on your homeowners policy.

So do I need a separate flood insurance policy?

If you live in a higher-risk flood zone, your mortgage company may require you to have flood coverage as a condition of your loan. If not, however, the choice is up to you, though it is often an important precaution homeowners may take, as flooding can occur in areas outside of higher risk flood zones. Hurricane Harvey is a prime example of this, as it left thousands of Texas homes underwater, costing millions in damages. So even if it’s not required by your lender, it’s still worthwhile to consider purchasing a flood insurance policy as it could prevent you having to pay a large amount out-of-pocket if you wake up to find floodwaters have unexpectedly risen around your home.

Did you know manufactured home policies through 21^st Insurance Agency include flood coverage? Our agents can help you find manufactured home insurance that you can depend on, with affordable rates that will ensure your budget stays above water.
Contact our team at 844-343-9408 or contact us online today to get started.