Guide About Flood Insurance : You might think your home won’t get flooded because you’ve never seen more than a big puddle in your yard. But 99% of counties in the United States were impacted by flooding between 1996 and 2019, according to FEMA.
A standard homeowners insurance policy won’t cover flood damage—and only between 5% and 15% of homeowners have flood insurance, according to the National Association of Insurance Commissioners. Without flood insurance, you could be hit hard with out-of-pocket expenses. The average payout on a flood claim from the National Flood Insurance Program (NFIP) was $52,000 in 2019, according to the most recent data from the FEMA.
What Is Flood Insurance and How Does it Work?
A flood insurance policy covers your house and your belongings for flood-related damage. It’s separate from a homeowners insurance policy, which usually doesn’t cover flood damage from problems like hurricanes and torrential rain.
The majority of homeowners who buy flood insurance buy it from the National Flood Insurance Program, but you may be able to buy a policy in the private market.
Flood insurance can cover problems such as:
- Storm surges
- Inland flooding, such as rivers and streams overflowing during a storm
- Flash floods
Flood insurance through the NFIP has a 30-day waiting period before coverage goes into effect, meaning you can’t make a flood insurance claim for damage that occurred during the waiting period. Some private flood insurance companies have a shorter or no waiting period. For example, Zurich Residential Flood Insurance does not have a waiting period.
If your house and belongings are damaged or destroyed by a flood, you can file a claim with your flood insurance company and be covered up to your policy’s limit. For example, if you had an NFIP policy with $250,000 in building coverage, you would be covered up to that amount. Some homeowners purchase private flood insurance as an “excess” policy to provide additional coverage on top of their base NFIP policies.