Do you need flood insurance?
99% of counties in the United States have been impacted by a flood event, according to FEMA. Even the driest places in America, like Death Valley, have dangerous flash floods.
Even the smallest amount of flooding can cause significant damage. According to floodsmart.gov, just 1 inch of water can cause $25,000 of damage to your home.
10 Things to Know About Flood Insurance
If you have questions about flood insurance, take a look at this list of the top things to know to protect your home and belongings.
1. Flood insurance is not included in homeowners insurance
Flood damage is not typically covered by homeowners insurance, renters insurance, or mobile home insurance policies. Additional flood insurance is the best way to protect your home and belongings in the event of a flood.
The NFIP (National Flood Insurance Program) offers two types of flood coverage: building coverage and contents coverage.
- Building coverage includes protection for flood damages done to
- Electrical and plumbing systems
- Furnaces and water heaters
- Refrigerators, cooking stoves, and built-in appliances like dishwashers
- Permanently installed carpeting
- Permanently installed cabinets, paneling, and bookcases
- Window blinds
- Foundation walls, anchorage systems, and staircases
- Detached garages
- Fuel tanks, well water tanks and pumps, and solar energy equipment
Content coverage covers the personal property inside your home.
2. Flood insurance is available for renters
You may think you don't need flood insurance if you're renting. Even if your landlord has flood insurance, it could be building coverage only and not cover your personal belongings.
Consider adding flood content coverage to your renter's insurance policy if you are a renter.
Content coverage can be separated from building coverage and includes:
- Personal belongings such as clothing, furniture, and electronic equipment
- Washer and dryer
- Portable and window air conditioners
- Microwave oven
- Carpets not included in building coverage (e.g., carpet installed over wood floors)
- Valuable items such as original artwork and furs (up to $2,500)
3. Flood insurance doesn't cover all water-related damage
Flood insurance covers losses directly caused by flooding, which is defined as an excess of water on land that is normally dry. But it doesn't cover all water-related damage in every situation.
Flood insurance typically doesn't cover
- Damage caused by moisture, mildew, or mold that could have been prevented by a property owner or tenant (non-flood related)
- Damage caused by moving earth (landslides) even if the moving earth is flood-related
- Damage to property and belongings outside of the building (like landscaping, decks, or swimming pools)
- Damage to vehicles and their parts
- Additional living expenses while a home is being repaired
4. You may need flood insurance even if you live in a low-risk flood zone
Even though flood insurance isn't typically federally required in low-risk neighborhoods, anyone can be financially vulnerable to floods. In fact, from 2014 to 2018, over 40% of all NFIP flood insurance claims originated from outside "high-risk" flood areas.
5. Flood risks vary from state to state and place to place
Your risk for flooding can increase depending on where you live. Some states have historically higher instances of flooding, while others rarely are hard hit by severe floods.
States with the highest risk for flooding, include:
States with the lowest risk for flooding
- New Hampshire
Even within a state, the risk of flooding can increase or decrease from place to place.
Coastal cities are more vulnerable to floods based on rising sea levels caused by warming oceans and melting glaciers. Inland cities in arid climates can be at risk of flash floods from heavy rains, and cities near rivers and reservoirs are also more at risk.
6. Flood insurance may be required by your mortgage lender
Are you required by law to have flood insurance?
Under federal law, the purchase of flood insurance is mandatory for all federal or federally-related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas.
If the property is not in a high-risk area, however, federal law does not require flood insurance.
But your mortgage lender may require it in order to fund a home loan.
7. Flood maps can change
Flood maps dictate whether you are in a high-risk or low-risk flood zone. But these maps are not permanent -- flood risks change over time, and so do flood maps.
Water flows can change due to construction, community development, changing weather patterns, or terrain changes, leading to flood map updates.
Flood hazards can decrease, too. Communities that build levees and dams actually decrease flood risk over time.
Flood hazards change over time. Updated flood maps provide a more accurate picture of a property's flood risk.
8. Your zip code isn't the only factor in flood insurance costs
Flood insurance rates are based on a number of factors, including:
- Flood risk (e.g., your flood zone)
- The type of coverage being purchased (e.g. building and/ or contents coverage)
- The deductible and amount of building and contents coverage
- The location of your structure
- The design and age of your structure
- The location of your structure's contents (e.g. are your utilities elevated?)
Tip: An Elevation Certificate (EC) showing your home’s elevation in relation to the base flood elevation may lower the cost of your insurance.
9. Don't wait for the rainy season to get flood insurance
The best time to get flood insurance is before the meteorologists start warning of incoming storms, hurricanes, or floods.
Flood insurance policies typically have a 30-day waiting period from the date of purchase until your policy goes into effect. If you experience flood damages before your policy goes into effect, you may be left unprotected and vulnerable to financial damages.
10. Disaster assistance is not a substitute for flood insurance
Disaster assistance from the Federal Emergency Management Agency (FEMA) is made available only when there is a Presidential Disaster Declaration.
Most flood events do not result in a disaster declaration. When they do, federal disaster assistance is designed to help get you back on your feet, not to restore your home to its pre-disaster condition.
Low-interest disaster loans from the U.S. Small Business Administration (SBA) must be repaid – on top of your existing mortgage. So you could be paying for flood damages on top of your mortgage payments... plus repaying your disaster loan.
If you receive disaster assistance in the form of a federal grant or loan, you will be required to purchase and maintain flood insurance for the duration that you live there.
Claims paid by flood insurance don't have to be paid back and are designed to help you restore your property to its pre-disaster condition.
Federal disaster insurance can help you recover from and get back on your feet after a devastating flood event. But it's not a guarantee, and it's not a replacement for the coverage and protection you get when you have flood insurance in place.
Protect Your Building and Belongings with Flood Insurance
If you want to learn more about how to protect your structure or personal property in the event of flooding or other natural disasters, call Aegis Insurance Markets. Our team of experienced insurance professionals will help you understand your unique risks and shop the insurance market for the most affordable policies to protect your buildings and belongings.
Get a free quote or call us at 800-579-6369 today.