Do I need flood insurance to buy a home

Flood Insurance - do you need it?

If you think a regular home hazard insurance policy covers losses caused by a flood or heavy rains, think again

You need specialized flood insurance to cover flood damage caused by a storm, hurricane, heavy rain or ineffective levee. Standard homeowners’ coverage provides no compensation for flood damage, although floods are the most frequent natural disasters in the United States. Here are the basics from the National Flood Insurance Program.

To protect homeowners from catastrophic losses related to floods, the federal government created the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA)

The NFIP, through nearly 90 private insurance companies, offers flood insurance to homeowners, renters and business owners if their community participates in the NFIP by adopting and enforcing ordinances to reduce flood risks. 

Most mortgage lenders require flood insurance on all houses and businesses in areas designated by FEMA as “high risk” for flooding (designated A and V zones). While homes and businesses located in moderate-to-low risk areas that have mortgages from federally-regulated or insured lenders typically are not required to have flood insurance, a mortgage lender can still require it.

Homeowners can choose to purchase flood insurance even if it is not required

The cost for flood coverage varies, although rates are set and do not differ from company to company or agent to agent. Many factors can affect your flood insurance premium, including the amount and type of coverage purchased, location, flood zone, and the design and age of your structure. 

A local, licensed flood insurance agent can help you to assess the premium for your specific property and determine whether you qualify for any discounts.

Coverage Flood insurance protects two types of insurable property: building and contents

The first covers your building, the latter covers your possessions; neither covers the land they occupy.

Building policies start coverage at $20,000 and go up to $250,000 for the insured building and its foundation, including these pieces of home infrastructure:

Shelving and cabinetry, the electrical and plumbing system, Central air conditioning equipment, furnaces, and water heaters, Refrigerators, cooking stoves, and built-in appliances such as dishwashers, and permanently installed carpeting over unfinished flooring debris removal.

If you opt to purchase contents coverage, it will extend to these possessions/valuables:

Clothing, furniture and electronic equipment, curtains portable and window air conditioners, portable microwaves and dishwashers, carpeting not already included in property coverage, clothing, washers and dryers, freezers and the food in them, and certain valuable items such as original artwork and furs (up to $2,500)

It is helpful to prepare an inventory of your house contents to make it easier to file a claim. Contents coverage starts at $8,000 and goes up to $100,000.

What's not covered

As with any insurance policy, the “exclusions” from coverage in your policy can be significant—and costly if you are not aware of them. For example, flood insurance does not cover costs associated with damage caused by these issues: Backups through sewers or drains, discharge or overflow from a sump pump, or damage caused by moisture, mildew or mold that  you could have avoided.

Regardless of your home’s zone or date of construction, coverage is limited in areas below the lowest elevated floor, such as basements, walkout basements, crawl spaces, and enclosed areas under elevated buildings.

Waiting period

Although there is no waiting period for coverage when a mortgage lender requires you to obtain a flood policy before closing on a loan, there is a mandatory 30-day waiting period for the start of coverage in most other situations.

For more information about NFIP or to locate an agent in your area offering flood insurance, visit

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