Superstorm Sandy served as a harsh reminder for many of its victims that only flood insurance covers losses from flooding, not homeowners insurance.
A 2012 survey by the Insurance Information Institute, a New York-based trade group, found that just 13 percent of U.S. homeowners had flood policies, including 14 percent in the Northeast, where Sandy struck.
Do you need flood insurance? It depends on where you live and if your mortgage lender requires it. Many do, especially if they are in a floodplain and their mortgage is federally backed, such as by the Federal Housing Administration.
The Federal Emergency Management Agency, or FEMA, administers the National Flood Insurance Program, the primary source of coverage for homeowners and renters.
FEMA says everyone is at risk because even small streams can flood. Your insurance agent and lender will know whether your home is in a flood zone.
Only then will you really need the coverage, says J. Robert Hunter, insurance director for the Consumer Federation of America.
Incidentally, Hunter, who once ran the National Flood Insurance Program, doesn't have flood coverage for his home near Washington, D.C. "But I'm at the very apex of a hill, and the Potomac River is 50 feet down," he explains.