Is Flood Insurance Included in Your Homeowners Policy?

Standard homeowners insurance policies generally do not cover flood damage, though they may cover other specific water-related incidents. These policies explicitly exclude damage caused by natural flood events. Understanding this distinction is important for property owners.

Homeowners Policy and Flood Damage

A standard homeowners insurance policy covers many types of water damage, but with limitations. It typically covers sudden water discharge within the home, such as from a burst pipe, a leaking appliance, or an overflowing toilet. Damage from a sudden roof leak due to a covered peril, like a storm, may also be included. However, these policies do not cover damage from gradual leaks, poor maintenance, or neglect.

The crucial exclusion in standard homeowners policies is damage caused by a “flood.” The National Flood Insurance Program (NFIP) defines a flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land or two or more properties, at least one of which is the policyholder’s. This definition includes overflow of inland or tidal waters, unusual accumulation or runoff of surface waters, and mudflows. Damage from heavy rainfall, overflowing rivers, or storm surges falls under this exclusion, meaning a separate policy is needed.

Understanding Separate Flood Coverage

Flood insurance is a distinct policy designed to cover damages from flood events, which are typically excluded from standard homeowners insurance. This coverage protects both the building structure and its contents from direct physical loss due to flooding. Building coverage often includes the foundation, electrical and plumbing systems, furnaces, water heaters, built-in appliances, and permanently installed carpeting and paneling. Contents coverage, which must often be purchased separately, protects personal belongings such as furniture, clothing, and electronics.

The primary provider of flood insurance in the United States is the National Flood Insurance Program (NFIP), managed by the Federal Emergency Management Agency (FEMA). The NFIP offers coverage for up to $250,000 for building property and up to $100,000 for personal property. A growing private flood insurance market also exists, offering alternative policies that may provide higher coverage limits and additional benefits not available through the NFIP, such as coverage for temporary living expenses.

Purchasing Flood Insurance

Policies are primarily available through the National Flood Insurance Program (NFIP) or the private flood insurance market. NFIP policies are sold by private insurance companies that participate in the Write-Your-Own (WYO) program, or directly through the NFIP. To purchase a policy, individuals can contact their existing home or auto insurance agent.

When purchasing flood insurance, be aware of waiting periods before coverage becomes effective. NFIP policies generally have a 30-day waiting period from the date of purchase. Private flood insurance policies typically have shorter waiting periods, often 10 to 14 days, though this can vary by insurer. Exceptions apply when flood insurance is required for a loan closing or when a property is newly mapped into a high-risk flood zone. Premiums are influenced by several factors, including the property’s flood zone designation, its elevation relative to the Base Flood Elevation, the building’s age and characteristics, the amount of coverage selected, and the chosen deductible.

When Flood Insurance is Required

Flood insurance can be a mandatory requirement under certain conditions. It is most commonly required for properties in a Special Flood Hazard Area (SFHA) with a mortgage from a federally regulated or insured lender. SFHAs are high-risk flood zones identified by FEMA on Flood Insurance Rate Maps (FIRMs), often designated with zones beginning with “A” or “V.” These areas have at least a one percent annual chance of flooding, sometimes referred to as a “100-year floodplain.”

Lenders typically require flood insurance in SFHAs to protect their financial investment. This requirement applies to various types of federally backed mortgages, including those from the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Even if a property is not in a high-risk zone, some lenders may still require flood insurance as a condition of the loan based on their internal risk assessments. Properties that have previously received federal disaster assistance for flood damage may also be required to maintain flood insurance for future eligibility.