How to Buy Flood Insurance Coverage

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If you’re a homeowner and you carry a homeowner’s insurance policy on your house, you may think you’re completely covered. However, you could be leaving yourself open to some major out-of-pocket repair costs if your house sustains water damage. More than 20 percent of flood claims originate from outside of a flood zone, according to the Federal Emergency Management Agency, or FEMA, which means that virtually no home is safe from potential flooding, even if you live well outside of a floodplain.

According to the Center for Research on Environmental Decisions, floods are the most common natural disaster, and therefore the most costly type of natural disaster in the U.S. The only way to completely cover yourself, and your home, is by purchasing flood insurance. Without it, you’ll be paying out of pocket for any and all repairs to your home if it floods.

All it takes is a few inches of water to do some devastating damage to your home, and just one inch of water can do a whopping $25,000 worth of damage to your property, according to FEMA. And, while there may be a handful of homeowners policies that include flood insurance, it’s more than likely you won’t be covered under your normal policy.

But it’s not just homeowners who may need a flood insurance policy. Renters typically aren’t covered for flood damage under a standard rental policy, and while you likely won’t be the one ponying up for the cost of new floors and drywall (if the flood wasn’t your fault), you do need a contents-only flood policy to make sure your furniture and other items are covered. It will help pay for the cost to repair or replace your items in case of flood damage.

How to buy flood insurance

Wondering how to buy flood insurance? It isn’t like buying homeowners insurance. You can only purchase flood insurance through an insurance agent or an insurer that participates in the federally backed National Flood Insurance Program, or NFIP. If you already have an insurance agent, start with them, but be aware that not all agents offer it, and it can be tricky to find in areas that are prone to flooding. You cannot buy it directly from the NFIP, according to FEMA, so if your agent does not sell flood insurance, you can contact the NFIP Referral Call Center to request an agent referral.

Which insurance carriers offer flood insurance?

Not all agents or companies offer flood insurance. You can get it through:

  • One of the 59 private companies that offer it, including Allstate, Farmers Insurance, Liberty Mutual and USAA.
  • The National Flood Insurance Program’s Servicing Agents, which is only an option if you’re in one of the 22,000 participating communities. If you’re hoping to bundle your car insurance with flood insurance, Geico offers flood insurance through the NFIP.

Both are backed by the federal government, which means either is a solid option.

What you need to know before you buy flood insurance

Before you make that call to your insurance agent, though, you need to know what to ask to make sure you’re completely covered. FEMA suggests asking your agent the following:

  • Does my community participate in the National Flood Insurance Program? FEMA says that most communities do participate, and your agent can tell you if that’s the case. If you want to know prior to your call, you can always look it up online in the Community Status Book.
  • What flood zone do I live in? What is my property’s flood risk? Is there a flood map change coming that could affect what I pay? Many, many communities are built on a flood zone, and you may not even be aware that your house is situated on one. It’s important to know what the risk is for flooding to your home––a number of factors can affect it––and changes are frequently made to the flood map, which could raise the cost of your policy.
  • What will and won’t be covered? As with any insurance policy, there are things that will or won’t be covered, and it’s important to know what the policy covers before you buy flood insurance. Does it cover the contents of your home or just damage to the property? What types of floods are covered?
  • How much coverage should I get for my building and for my contents? This is an important question; being underinsured isn’t much better than being uninsured. You’ll want to make sure that you cover as much of your property as possible, provided that it fits into your budget.

What does a typical flood insurance policy cover?

In general, flood insurance policies only cover damage from natural flood disasters, not from an overflowing toilet or broken pipe. So in order for your flood policy to cover damage, it has to be from a naturally occurring incident.

If you need more clarification, FEMA’s definition of a flood can help sort things out. According to FloodSmart, FEMA’s flood guide, a flood is defined as (1) “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 (at least 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; or c.mudflow*. (2) collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood.” So, in other words, water damage that occurs from natural disasters.

There are a couple of types of flood insurance, and what kind you have will dictate what’s covered. The first is building property coverage, which covers:

  • The structure of your house
  • The electrical and plumbing systems
  • Central AC, furnaces, vacuum systems, etc
  • Refrigerators and built in appliances
  • Permanently installed carpeting
  • Window blinds
  • Detached garages

If you want the items inside your house to be covered under your flood policy, you’ll have to purchase what is called “personal property coverage,” which covers most personal belongings, separately. This type of policy covers:

  • Clothing, furniture and electronic equipment
  • Curtains
  • Portable air conditioners, window units
  • Carpets not included in building coverage
  • Washers and dryers
  • Food freezers and the food in them
  • Valuables like artwork and fur (up to $2,500)

Rental-specific coverage

Businesses and homeowners aren’t the only ones who need flood insurance; renters should look at what options are available, too. If you’re a renter, you can also get a policy through the NFIP that will cover the contents of your rental, up to $100,000. The cost of the policy will depend on where you live and how much of a flood risk there is to the property you’re renting. If you’re located in a low- to moderate-risk area, you may qualify for a Preferred Risk Policy, and it won’t cost much at all.