Flood Insurance

If you live in an area that often floods, then you probably live in a flood zone and need flood insurance. And unless you have specifically requested this coverage, then your home isn’t protected against floods because flood coverage is not typically included with homeowner’s insurance. It must be purchased separately or added as a rider. This might not matter if you are not located in a flood zone. But if you are in a flood zone, then you should definitely consider this coverage. And if you have a mortgage, your lender will probably require it.

What Does It Cover?

Flood insurance covers damage to your property and possessions that is caused by an actual flood. It usually does not include damage caused by a leaky pipe or rain. You can get coverage to protect your property or your belongings. You can also get coverage that protects both.

It is important to understand what is covered in the policy. The physical structure of your home and its foundation is covered when you have building coverage. It includes plumbing and electrical systems, air and heating systems, cabinets and paneling, and more. Personal belongings coverage is for things such as clothing, furniture, appliances, electronics, and other valuables. If you live in an area that participates in the NFIP, then you are eligible for coverage.

This insurance is usually mandatory for homes and businesses in high-risk flood areas, especially if the buildings have mortgages from insured or federally regulated lenders. Even if you live in a moderate-to low-risk area, this insurance may still be a requirement by local lenders. Also, there may be a 30-day wait period from the date of purchase until the policy goes into effect. Considering that, you should apply for coverage as soon as possible. Some exceptions include if you are purchasing the insurance in connection with increasing, making, renewing, or extending a mortgage loan.

Do not underestimate the damage a flood can cause. If you are in a flood zone, then flood insurance can mean the difference between your family’s recovery and financial ruin.