Flood Insurance & Water Damage – What You Need To Know

Are you aware that a homeowner’s insurance policy does not cover a flood loss? And did you know that water damage to your home is not always covered by flood insurance? Before deciding whether or not to purchase flood insurance, there are a few things you should know.

What’s the difference between flooding and water damage?

The National Flood Insurance Program defines a flood as: A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is your property) from: a. Overflow of inland or tidal waters, b. Unusual and rapid accumulation or runoff of surface waters from any source, c. Mudflow.

Here are a few examples of flooding that homeowner’s insurance policies will not cover:

  • When tidal water rises above the normal high tide mark and forces its way into your home
  • When a creek or river overflows its banks and forces its way into your home
  • When a heavy rainfall pools around your home and forces its way into your home

And here are a few examples of water damage that are typically covered by a homeowner’s insurance policy:

  • If a branch falls from a tree during a storm and damages your roof, allowing rain to enter your home
  • When a pipe bursts in your home and damages your property

These examples are certainly not the definitive word on flood insurance and homeowner’s insurance coverage – for information about how your flood insurance policy or homeowner’s insurance policy would respond to a claim, you should speak to your insurance agent for advice based on your specific policy information.  However, you can see the difference between what type of water damage is covered by homeowner’s insurance compared to water damage that is covered by flood insurance.

Do I need flood insurance if I don’t have a mortgage?

There’s a common misconception is that if you do not have a mortgage on your home, you do not need flood insurance. If you live in a “high risk” flood area, your mortgage company will typically require that you maintain flood insurance up to the balance of your outstanding mortgage balance (or the up to the maximum limit available through the National Flood Insurance Program). However, paying off your mortgage does not mean that your home is no longer at risk of flooding! If you live in an area that is at risk for flooding, you should keep your flood insurance even if you do not have a mortgage company that requires it.

Do I need flood insurance if I don’t live in a “high risk” flood zone?

Just because your home is not located in a “high risk” flood zone does not mean that you are not at risk of flooding. Even if you live in an elevated area, or are nowhere near a body of water, heavy rainfall can cause severe flood damage to your home.

As you may expect, it’s generally much less expensive to purchase flood insurance for a home that is not located in a “high risk” flood zone – and you may find the peace of mind is worth the cost. In the event of a flood, however unlikely it may seem, you will be glad to have coverage for your home.

What are the limits on flood insurance?

The National Flood Insurance program will only provide coverage up to a set maximum amount, but there are Excess Flood markets available which will insure your home beyond the limit available through the National Flood Program.

A knowledgeable independent insurance agent will be more than happy to assist you in understanding all the risk surrounding a flood event and how it can affect your home.