Myth: Flood insurance covers everything
Not necessarily. When it comes to the physical structure of your house, federal flood insurance policies top out at $250,000, Hackett says. If you have a $300,000 house that's a total loss because of a flood, the most you can recoup through the program is $250,000 to cover the structure itself.
For your personal possessions, the cap is $100,000 under the federal program.
And those limits are "definitely something you should keep in mind before purchasing a high-value home in an area that's susceptible to flooding," Hackett says.
If you already have insurance through the federal program, then you can buy "excess flood insurance" through a private carrier that would cover claims above the national limits, Griffin says. In essence, it's a flood policy with a $250,000 deductible, he says.
While federal flood insurance pays to rebuild the structure, it only pays current value on possessions, Griffin says. It doesn't cover anything in a basement (other than your heating and air-conditioning system). It doesn't cover living expenses if you have to relocate while your home is being repaired, he says.