Flood Insurance
What is flood insurance?
While your homeowners policy typically covers various perils, such as fire and theft, it often excludes damages caused by flooding. Homeowners policies may offer coverage for water damage from burst pipes or sewer backups (which is an optional add-on), but you will need a separate flood insurance policy to protect against losses from flood events, like heavy rainstorms causing water accumulation.
What’s does flood insurance cover?
Flood insurance provides coverage for two main areas:
Building: This includes the structure, electrical and plumbing systems, and heating and air conditioning units.
Contents: Coverage extends to personal belongings such as furniture, electronics, clothing, and other items.
Please note that flood insurance does not cover damage caused by moisture or mold, similar to most homeowners policies. Additionally, there are specific limitations regarding basement coverage. For full details, please refer to the policy contract.
Do I need flood insurance?
Flooding can occur in any area, regardless of perceived risk. If you live in a low-risk zone, you might qualify for a Preferred Risk Policy through the National Flood Insurance Program (NFIP). However, if you're in a moderate to high-risk area, your lender may require you to purchase flood insurance.
Other considerations
Flood insurance differs from other types of coverage in several ways:
Waiting Periods: If you buy a flood policy independently (not mandated by your lender), there is typically a 30-day waiting period before coverage takes effect under the NFIP. Some private flood insurers may offer a shorter waiting period of just 10 days.
Cancellation Refunds: Generally, there are no refunds for midterm cancellations of flood policies. If you cancel due to the sale of the property, you may be eligible for a refund.
How do I get flood insurance?
There are two primary markets for obtaining flood insurance:
National Flood Insurance Program (NFIP): This program, administered by FEMA, offers flood insurance typically sold through private insurance companies. Rates are determined based on your flood zone and other factors, with maximum coverage limits of $250,000 for the dwelling.
Private Flood Insurance: Alternatively, you can explore the private flood market, which allows for tailored coverage options that exceed NFIP limits. Private insurers may also offer reduced waiting periods compared to the NFIP.