What is flood insurance? Your guide to coverage, costs and how to buy.

Flood insurance is typically a separate policy from homeowners insurance that specifically protects your property against flood-related events. It’s not always necessary, but it’s worth considering if you live in an area where flooding could occur.

What is flood insurance?

Flood insurance is a type of property coverage that can protect your home and belongings from flood-related water damage. Possible flooding situations could include:

Please note that coverage may vary by policy, so be sure to read the terms, conditions and exclusions to see what your plan covers.

Does homeowners insurance cover flooding?

Standard homeowners insurance policies typically do not cover flood damage, so you will need to purchase a separate plan if you want this coverage. Depending on your provider, you may be able to purchase a special endorsement as an add-on to your home insurance, but it is more common to have to purchase a separate policy.

What does flood insurance cover?

Flood insurance is often divided into two categories: dwelling coverage and personal property coverage. The former typically covers the structure of your home and built-in appliances, while the latter covers your belongings.

Below are some of the items you can find in each type of coverage:

Housing coverage

• The structure of your house, including the foundation.

• Air conditioning units and boilers.

• Integrated appliances, such as refrigerators and dishwashers.

• Garage and other independent structures.

• Permanently Installed Carpets

• Permanently installed panels, shelving and cabinets

• Plumbing and electrical systems.

Personal Property Coverage

• Your personal belongings, such as clothing, electronics, and furniture.

• Carpets that are not already included in your home coverage

• Certain high-value items, such as jewelry and art (often up to a certain amount)

• Clothes washers and dryers

• Curtains

• Food freezers and the food inside them.

• Portable and window air conditioners

• Portable microwave and dishwasher

Read more: What does home insurance cover?

What doesn’t flood insurance cover?

Flood insurance generally does not cover:

• Avoidable damage, such as damage caused by moisture, fungus or mold.

• Currency, precious metals and share certificates

• Daily living expenses and temporary housing.

• Financial losses caused by business interruption.

• High value items beyond certain limits

• landscaping

• Most motor vehicles and their parts.

• Landslides or other types of earth movement, even if caused by flooding

• Outdoor property, including hot tubs, pools, septic systems, patios, decks and fences.

Do you need flood insurance?

Generally, flood insurance is not required except in specific situations. For example, it may be necessary if you have a home or business in a Special Flood Hazard Area (SFHA) and have a government-backed mortgage. You may also need flood insurance if it is a requirement in the terms of your mortgage, even if you don’t live in a high-risk flood area.

How Much Flood Insurance Coverage Do You Need?

The terms of your mortgage may require that you have enough protection to cover the outstanding balance of your loan, but you typically want enough coverage to completely rebuild your home if necessary. This is different from covering the resale value of your home, which could be much less than the cost of rebuilding.

You can estimate the coverage needed by adding up the costs of rebuilding your home and replacing damaged or destroyed belongings.

Please note that National Flood Insurance Program (NFIP) coverage has a maximum of $250,000 of building coverage and $100,000 of contents coverage. If you need more than that, you may need to purchase an additional private policy to close the gap or have a separate private policy that provides sufficient coverage on its own.

How much does flood insurance cost?

According to FEMA, 37% of NFIP policies nationwide cost between $0 and $1,000 per year, while 32% cost between $1,000 and $2,000 per year for a single-family home. However, the final cost of your policy could vary depending on these factors:

• Coverage: The total amount of your coverage and the type of coverage you choose may affect your cost. For example, increasing your personal asset limits will likely increase your rates, while increasing your deductible should lower them.

• Location: You may have to pay higher premiums in high flood risk areas than in lower risk areas.

• Age of origin: An older home may be more expensive to insure due to older materials and systems, which may pose a greater risk to your provider.

Read more: How much does flood insurance cost in each state?

How to buy flood insurance

You generally have two options for purchasing flood insurance:

1. Buy a government-backed NFIP plan

2. Buy a plan from a private insurer

If you already have a homeowners insurance policy, you should be able to contact your insurer to add flood insurance. Many providers can underwrite flood insurance through the National Flood Insurance Program. If yours doesn’t have that option, you can search for an eligible provider through the NFIP directory.

You can also compare private insurer options for policies that are not backed by the government. Depending on your needs, you may be able to find higher coverage limits and additional plan options through a private insurance company.

How to Reduce Flood Insurance Costs

Lower your coverage

While this is not an ideal solution, reducing your coverage is a quick and easy way to reduce your insurance premium if you need to put some money back in your pocket. However, we do not recommend having insufficient coverage to rebuild your home, if necessary.

Increase your deductible

Choosing a higher deductible is an easy way to lower your premium, but you should keep in mind that if you file a claim, you will have to pay that higher deductible. This strategy has pros and cons, but it might make sense depending on your financial situation.

Provide an Elevation Certificate (CE)

An EC helps insurers evaluate your property’s flood risk, and you can consult with your local floodplain manager about purchasing one. The NFIP no longer requires an EC to purchase coverage, but providing one could help reduce your insurance costs.

Mitigate your risks

Considering that the cost of flood insurance is based on the flood risk of an individual property, you may be able to take steps to mitigate your risk and reduce the cost of your insurance. This could include raising your utilities, such as water heaters and electrical panels, installing flood openings, and filling basements.

FEMA/NFIP vs. Private Flood Insurance

At first glance, the main difference between NFIP coverage, administered by FEMA, and private flood insurance is that NFIP coverage is backed by the government. Other than that, the differences lie in the amount of coverage and the overall coverage limits.

Generally, private flood insurance allows for higher coverage limits and more comprehensive coverage options. However, depending on your situation, you may not need more than what NFIP policies offer.

More information: How FEMA Flood Insurance Works

Flood Insurance FAQs

When does flood insurance go into effect?

It may depend on your policy, but it is common for flood insurance coverage to take effect 30 days from the date of purchase. There may be no wait or a shorter wait if you are renewing your policy or if your property is in a newly designated high-risk flood zone.

Is flood insurance required?

Flood insurance is generally not required unless it is stated in the terms of your mortgage. This could be the case if you live in a high-risk flood area and have a government-backed mortgage, or if your lender requires flood insurance regardless of where you live.

Can renters get flood insurance?

Yes, renters can obtain flood insurance through the NFIP or a private insurance company. Typically, this would be a separate policy from your renters insurance plan.

Does flood insurance cover basements?

Yes, flood insurance can cover basements, but coverage may be limited by the terms and conditions of your policy. For example, boilers, heat pumps, breaker boxes, and electrical boxes may be covered, but certain personal property and basement improvements may not be covered.

Can I get flood insurance outside of a flood zone?

Yes, you can usually purchase flood insurance even if you do not live in a high-risk flood area. NFIP flood insurance is available to anyone living in one of more than 22,000 communities nationwide, and you can also purchase coverage through a private company as an alternative option.

Does FEMA disaster assistance replace flood insurance?

No, FEMA disaster assistance is not a substitute for flood insurance. FEMA disaster assistance is available only when the President of the United States declares a federal disaster, and FEMA grants may not always cover all losses. Flood insurance helps cover you in the event of flood-related events, even if they are not declared disasters.