Water damage in a home is usually covered by homeowners insurance under specific circumstances. However, damages caused by a flood, such as a storm surge, won't be covered by your homeowners insurance and will need to be covered by a separate flood insurance policy.
If you want to protect yourself from this risk, flood insurance is available from major insurance companies and even many independent brokers. The National Flood Insurance Program (NFIP) also provides a list of different insurers that offer flood insurance.
You can ask your current homeowner insurance agent or mortgage lender for recommendations.
Because most homeowners insurance policies do not cover flood damage, you’ll want to buy additional coverage for this peril.
When Does Homeowners Insurance Cover Flood Damage?
Most homeowners insurance policies do not cover water damage from flooding or natural disasters, such as hurricanes. In order to obtain flood insurance, homeowners must purchase a separate policy that will cover perils outlined below.
- If your home’s structure is damaged due to flood. This can include things like your house’s foundation, electrical and plumbing, central air systems and furnace, water heaters, refrigerators, cooking stoves and built-in appliances.
- If the contents inside your home are damaged by flood. This can include clothing, furniture, electronics, portable microwaves and portable air conditioners, dishwashers, washers and dryers.
Homeowners insurance policies rarely cover flood damage. In most cases, it is necessary to get a separate flood insurance policy to ensure you are protected. Homeowners may choose to take out insurance through the NFIP, which offers coverage for the following:
- Building coverage: A limit of $250,000 applies to replacement cost or actual cash value, whichever is lower.
- Contents coverage: Personal property is covered up to $100,000 in actual cash value.
- Valuables coverage: Fine art, jewelry and collectibles are covered up to $2,500. Each policy has a separate deductible.
It's crucial to understand exactly what NFIP coverage includes, how much it covers and what its limitations are.
When Doesn’t Homeowners Insurance Cover Flood Damage?
Flood damage caused by natural disasters is not covered by your homeowners insurance. To protect yourself from these risks, you need to purchase a separate flood damage policy. However, even this policy has certain limitations.
Here’s what flood damage policy doesn’t cover:
- Additional living expenses if you're forced out of your home
- Weakening or prolonged damage caused by moisture or mildew
- Exterior property and belongings
- Currency, precious metals and paper valuables
Do You Need Coverage for Flood Damage?
Flood insurance is either required by the government or your mortgage lender, depending on the risk of flooding in your area.
If you're unsure what zone your house sits in, you can check the FEMA Flood Insurance Rate Map. The panels map different flood zones, and these areas can be divided into three categories shown below:
Special Flood Hazard Areas
Special Flood Hazard Areas (SFHAs) have at least a 25% chance of flooding within 30 years, the length of most mortgages. The Federal Government mandates that every SFHA property with a mortgage insured by the Federal Government must have flood insurance coverage.
The likelihood of flooding can be significantly lower in these areas. In spite of this, almost 20% of all claims to the National Flood Insurance Program (NFIP) originate from this category. While flood insurance is not federally mandated in these areas, it is still highly recommended.
Areas with undetermined risk
There have been no flood analyses conducted in these areas. However, that does not mean that the areas are at no risk of flooding and that uncertainty is usually reflected in the price of a policy.
Where to Buy Homeowners Insurance
Almost every major insurance company, like State Farm, as well as smaller ones, such as Lemonade or Hippo, offers home insurance. The average monthly premium for homeowners insurance is $175 per month.
Even so, costs can differ from company to company. It is important to shop around and compare home insurance policies to make sure you are getting the best deal for your needs.
To get a better idea of how much coverage you might need, use the personal property calculator below.
About Mark Fitzpatrick
- FEMA. "Flood Maps." Accessed May 23, 2022.