Flood Insurance 101

It should also be noted, flood insurance usually does not include runoff from a heavy rain or water that gathers at a construction site. In fact, homeowners insurance won't protect residents from that either. Therefore, homeowners need to also purchase what is known as water or sewer backup coverage.

According to the Federal Emergency Management Agency (FEMA)/ National Flood Insurance Program (NFIP), here are some important things to consider when buying homeowners flood insurance:

Flood Insurance Basics

Consumers need to know that most homeowners policies do not cover flooding. Flood insurance is available to homeowners, business owners and renters. Homeowners, business owners and renters may purchase flood insurance for both a building and its contents.

What Are The Limits Of Flood Insurance Coverage?

Flood coverage limits for a standard flood policy are as follows:

Coverage Type Coverage Limit
One to four-family structure $250,000
One to four-family home contents $100,000
Other residential structures $250,000
Other residential contents $100,000
Business structure $500,000
Business contents $500,000
Renter contents $100,000

Flood Insurance Requirements

Residents who live in a high-risk area (or Special Flood Hazard Area) are required to purchase flood insurance if they have a mortgage from a federally regulated lender, and they must carry the insurance for the life of the mortgage. Residents with a mortgage on a building outside high-risk areas can also purchase flood insurance, and they may be eligible for a lower cost policy (called a Preferred Risk Policy). The NFIP encourages all residents to learn their flood risk and consider protecting themselves with flood insurance.

How To Find Out If Your House Sits In A Flood Zone

FEMA has created a website to see if your house sits in a flood hazard area. Click here to review the maps etc.

What Is and Is Not Covered By Flood Insurance?

Generally, physical damage to your building or personal property "directly" caused by a flood is covered by your flood insurance policy. For example, damages caused by a sewer backup are covered if the backup is a direct result of flooding. However, if the backup is caused by some other problem, the damages are not covered. The following list provides general guidance on items covered by flood insurance. Refer to your policy for the complete list.

What Is Insured Under Building Property Coverage

1. The insured building and its foundation

2. The electrical and plumbing systems

3. Central air-conditioning equipment, furnaces and water heaters

4. Refrigerators, cooking stoves and built-in appliances such as dishwashers

5. Permanently installed carpeting over an unfinished floor

6. Permanently installed paneling, wallboard, bookcases and cabinets

7. Window blinds

8. Detached garages (up to 10 percent of building property coverage); detached buildings (other than garages) require a separate building property policy

9. Debris removal

What's Insured Under Personal Property Coverage

1. Personal belongings such as clothing, furniture and electronic equipment

2. Curtains

3. Portable and window air conditioners

4. Portable microwave ovens and portable dishwashers

5. Carpets not included in building property coverage (see above)

6. Clothes washers and dryers

7. Food freezers and the food in them

8. Certain valuable items such as original artwork and furs (up to $2,500)

What's Not Insured by either Building Property or Personal Property Coverage

1. Damage caused by moisture, mildew or mold that could have been avoided by the property owner

2. Currency, precious metals and valuable papers such as stock certificates

3. Property and belongings outside of a building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools

4. Living expenses such as temporary housing

5. Basement improvements like finished walls, floors or ceilings, or personal belongings that may be kept in a basement, such as furniture and other contents

6. There are also some exceptions for coverage in areas below the lowest elevated floor of your home

7. Enclosed areas under the first floor used for storage; the contents will not be covered by flood insurance

What is the Preferred Risk Policy (PRP) with Flood Insurance?

Preferred Risk Policies are available for residential or nonresidential buildings also located in these flood zones, and that meet eligibility requirements based on the building's entire flood loss history. The Preferred Risk Policy offers multiple coverage combinations for both buildings and contents (or contents-only, for renters) that are located in low-to-moderate risk areas (B, C, and X Zones).

What Flood Damage Is Covered In My Basement?

Flood insurance covers your home's foundation elements and equipment that is necessary to support the foundation and structure (ie, furnace, water heaters, circuit breakers).

Should I Purchase Building and Content Flood Insurance?

The NFIP encourages flood zone individuals to purchase both building and contents coverage. Flood insurance does not cover basement improvements, such as finished walls, floors, ceilings or personal belongings that may be kept in a basement.

Does Flood Insurance Cover Flood Damage Caused By Hurricanes, Rivers, Or Tidal Waves Or High Tide Waters?

Yes, providing that, if confined to your property, the flood water covers at least two acres.

Is Flood Damage From Wind-Driven Rain Covered In A Normal Homeowners Insurance Policy Or Do I Need Flood Insurance?

No. When rain enters through a wind damaged window, door, through a hole in a wall or roof, the NFIP considers the resulting puddles and damage to be windstorm related, not flood-related. This why you need to buy flood insurance coverage.

Flood insurance covers overflow of inland or tidal waters and unusual and rapid accumulation or runoff of surface waters from any source.

How Can I Find Flood Insurance?
If you live in a community that participates in the National Flood Insurance Program (NFIP), you are eligible to purchase flood insurance. Over 20,000 communities participate, and it's likely that yours is one of them. To buy a flood insurance policy, call your insurance agent or company.

How Is My Flood Insurance Rate Premium Calculated?

A number of factors are considered when determining your flood insurance premium. The factors include the following: the amount and type of coverage being purchased, location and flood zone, and the design and age of your structure. For homes in high-risk areas (e.g., Special Flood Hazard Areas or AE, VE Zones) built after the first Flood Insurance Rate Maps were drawn for that community, the elevation of the building in relation to the base flood elevation is also required.

Will There Be A Waiting Period For My Flood Insurance Policy To Take Effect?

There is generally a 30-day waiting period from the time a flood insurance policy is purchased to when it actually goes into effect. Read about exceptions to this waiting period.