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Flood Insurance: What is Covered When Disaster Strikes?

Filed Under: Personal Insurance

Most home and property insurance policies do not provide coverage for damage due to floods. Congress created the National Flood Insurance Program (NFIP) in 1968 to help provide a way for property owners to financially protect themselves from flood damage. Flood insurance from the NFIP is available to homeowners, renters, condo owners and business owners.

What Does Flood Insurance Cover?

According to FloodSmart.gov, the official website of the National Flood Insurance Program, flood insurance policies cover physical damage to your property and possessions, including the following:

Building Property

  • The insured building and its foundation
  • Electrical and plumbing systems
  • Central air conditioning equipment, furnaces and water heaters
  • Refrigerators, cooking stoves and built-in appliances
  • Permanently installed carpeting over unfinished flooring
  • Permanently installed paneling, wallboard, bookcases and cabinets
  • Window blinds
  • Detached garages
  • Debris removal

 Personal Property

  • Clothing, furniture and electronic equipment
  • Curtains
  • Portable and window air conditioners
  • Portable microwave ovens and portable dishwashers
  • Carpets that are not included in building coverage
  • Clothes washers and dryer
  • Food freezers and the food in them
  • Certain valuable items such as original artwork and furs, up to $2,500

Exclusions

Certain items or types of damage are not covered by flood insurance, including:

  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner
  • Currency, precious metals and valuable papers such as stock certificates
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
  • Living expenses such as temporary housing
  • Financial losses caused by business interruption or loss of use of the insured property
  • Cars and other vehicles, and their parts

In addition to these exclusions, coverage for basements and areas below the lowest elevated floor is limited. These exclusions may apply to basements, crawl spaces, walkout basements, and enclosed areas under certain types of elevated buildings. You will need to talk with your agent about the specifics of your basement coverage. It may depend on the date of construction and where your home is located.

Contact Financial Assurance to Purchase Flood Insurance

Flood insurance can only be purchased from your insurance agent, not directly from the federal government. The cost of flood insurance from the NFIP varies depending on how much insurance is purchased, what it covers, and what the flood risk of your property is. When you apply for federal flood insurance, there will be a thirty-day waiting period after you have completed the application and made the first premium payment for the policy to become effective.

The agents at Financial Assurance can work with you to determine the coverage options that are right for you and your property, and we will help you determine how much coverage you need. You can also visit FloodSmart.gov to review the flood maps and find out the insurance requirements and flood risk for your area. You can also take a flood risk profile to find out what type of risk area your property is in.

Remember that floods and flash floods happen in all fifty states, and that just a few inches of water can cause tens of thousands of dollars in damage. According to the NFIP, people outside of high-risk areas file over 20% of NFIP claims and receive one-third of the disaster assistance allotted for flooding related disasters. The bottom line: everyone should consider purchasing flood insurance.

Contact us today to learn more.

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