flood insurance: what you should know 

Flood insurance coverage is excluded from traditional homeowners insurance policies - it is available only in the form of a separate policy from the federal government's National Flood Insurance Program. 

This is one of those bad surprises homeowners often become aware of only after a flood has destroyed their home, and it's too late to get the coverage needed to repair their home's damage.

Homeowners without insurance for flood damage can apply for federal disaster relief benefits. However, those come in the form of low-interest loans - a burden for those already struggling with too much debt after a flood disaster.

And should you even be able to get such a loan, you'll still be paying your mortgage along with interest on the loan to repair flood damage. Not an ideal situation, to be sure.

In short: It pays to ensure your finances aren't devastated - along with your home - in the event of catastrophic flooding. Weigh the costs of a separate flood insurance policy against the out-of-pocket expenses such a natural disaster would require now, long before a storm is on the horizon.

The Difference Between Flood Insurance and Homeowner's  Policies

  • Your home insurance policy covers many hazards - but flooding isn't one of them. You need a separate insurance policy to cover home water damage resulting from heavy rains, winter storms, and other natural occurrences.
  • There are two types of flood coverage: building and contents. Homeowner and condominium unit owners can buy up to $250,000 of building coverage; and up to $100,000 coverage for contents.
  • There are low-cost insurance policies. If you live in a low-to-moderate-risk area, there are more than 90 private insurance companies in the U.S. that offer affordable flood insurance backed by the federal government. Request online insurance quotes so that you compare home and contents insurance coverage and get the best rate.
  • Don't wait for a rainy day to get flood insurance. There is usually a 30-day waiting period before your home insurance goes into effect. Don't wait until a storm is brewing to consider your insurance options.
  • Don't rely on federal disaster assistance to cover your home's flooding damage.  Before federal disaster assistance is offered, the President has to declare a major disaster. Flood insurance coverage is in effect even when a disaster isn't declared. And even then, the average award for individual households is $4,000.

Flooding and Your Finances

History shows flooding affects your finances. Cleaning up a water-damaged home can set you back thousands of dollars. It merely makes sense to be prepared with adequate insurance coverage.

You might like these

  • 10 Fireplace Safety Tips: Burn, Baby Burn - Safely This Winter

    'Tis the season to light up the fireplace. But before you do, here are some fireplace safety tips to keep the home fires burning - safely.

  • Hurricane Safety Tips

    Hurricane safety means getting your home and family ready to weather the storm should it come thundering your way. These tips can help you prepare.

  • Home Security Systems: Comparing the Options

    If you have a large, vulnerable home, these home security systems are worth considering.

  • Home Safety Tips to Prevent Accidents

    Expecting guests? These 10 home safety tips can help ensure visiting family and friends have a safe visit by preventing common household accidents.

  • Home Safety Tips: The essentials

    Some threats to your family's safety you can detect before they cause harm; others cause damage without warning. Prepare for them with these home safety tips.

  • Home Fire Safety Tips

    Being prepared to act when a fire occurs will help you rest easier. These home fire safety tips can help get your home prepared.

  • 5 Flood Safety Tips

    These flood safety tips will help you prepare your family, your home, and your pets should a water disaster occur.

  • Earthquake Preparedness at Home

    Earthquake preparedness is essential, no matter where you live. Here are things you can do to keep your home and family safe in the event of a natural disaster.

  • Earthquake Insurance: Yes or No?

    Earthquake Insurance: Yes or No? 8 things you need to know when making this important insurance decision for your family so you can avoid financial aftershocks.

  1. Clean Home
  2. Safe at Home
  3. Flood Insurance: What You Should Know


Have your say about what you just read!