What Is Flood Insurance?
Summed up, flood insurance will cover your property/structure and most of your belongings if it’s inundated by natural water (i.e., rain, waves, etc.). Many policies dictate that the water must cover at least two acres of normally dry land in order to qualify for reimbursement.
Will My Homeowners Insurance Policy Cover Flood Insurance?
Unfortunately, no. A homeowners policy will never cover costs of floods or a number of other catastrophic accidents. It's too difficult to predict the total cost of flood damage (or damage by other natural disasters) to homes each year.
Also, not enough insurance policyholders will pay extra towards their premiums for this protection, in order to cover the amount of money the insurance company would have to pay in damage claims. Therefore, offering the coverage isn't worth it to them.
Why Do I Need Flood Insurance?
Well, for peace of mind, for starters. Floods cause millions of dollars in damage each year. And they are the most common natural disaster in the US. Water damage is also pricey.
As little as one inch of water in a home can cost as much as $21,000. Having coverage could mean the difference between financial devastation and being able to rest easy, should a storm hit your area.
What Does Flood Insurance Cover?
Flood insurance policies are similar to homeowners insurance policies in the sense that they exist to protect both your home and your stuff. The difference is that it's there to cushion the financial blow should your property become flooded by a natural water source (and no, a badly clogged toilet doesn't count).
Flood insurance will specifically cover:
Damage to/loss of your home: Including the foundation of the structure, electrical systems, indoor plumbing, built-in appliances and additional flooring installed - such as carpeting.
Damage to/loss of your stuff: Including furniture (built-in and free-standing), smaller/not built-in appliances, some food, valuables and clothing.
*Any depreciation of your property's value will be factored into what the insurance policy pays towards reimbursement for damages.