What Is Flood Insurance and Do I Need It?

Your typical homeowners insurance policy handles water damage from inside your home, such as a burst pipe or an overflowing appliance. It generally does not cover damage from water that originates outside and enters your home. This includes flooding from heavy rain, storm surges, or an overflowing river or creek. That gap in coverage is what makes a separate flood insurance policy necessary.

A standard flood insurance policy often covers damage to your home's structure and its foundation, electrical and plumbing systems, and major appliances. It may also cover personal belongings like furniture, clothing, and electronics, but usually for a separate, lower amount. Items like decks, patios, and landscaping are typically not covered. Policies vary, and your insurer decides what is covered, so reviewing the details is crucial.

• The building structure and its foundation
• Electrical and plumbing systems
• Built-in appliances like furnaces and water heaters
• Personal property and belongings
• Carpeting and window treatments
• Cleaning and debris removal related to the flood

Consider flood insurance if your mortgage lender requires it, if you live in an area with significant rainfall, or if your property is near a body of water. A humid climate with seasonal storms can lead to sudden, heavy downpours. Even one inch of floodwater can cause tens of thousands of dollars in damage. Protecting your investment from an uncovered disaster is a common reason homeowners choose it.

• Your mortgage lender requires it for a high-risk zone
• Your area experiences heavy seasonal rains or storms
• Your property is near a creek, river, or drainage area
• Your basement is finished or contains valuable items
• Your neighborhood has a history of drainage issues
• You want financial protection from a major uncovered loss