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What is Flood Insurance?

Mother Nature can be a beast. Earthquakes, tornadoes, hurricanes, and other natural disasters wreak havoc across the United States each year. Many of these weather events lead to flooding, which can damage or even destroy homes. Fortunately, flood insurance offers protection for these damages. And in most flood-prone areas, the U.S. government requires homeowners to carry flood insurance. Learn more about flood insurance here and why your basic homeowner’s insurance isn’t enough.

What’s the difference between home insurance and flood insurance?

Average flood insurance claims cost Americans $1.9 billion per year. All states experience floods, but some areas are at a higher risk for damages from floods than others. In Louisiana, flood damage in 2016 added up to more than $8 billion—just in August.

Some homeowners may think that their standard home insurance policy covers them in the event of a flood. But this isn’t true. While homeowner’s insurance covers water damage due to broken pipes or other internal issues, you’ll need extra protection against the wrath of natural flooding. Most umbrella insurance policies don’t cover flooding, either. This is because in the U.S. flood insurance is provided through the National Flood Insurance Program (NFIP) in partnership with private insurers.

Flood coverage will reimburse you differently for structure and possessions:

  • For your home’s structure, you’re covered for the replacement cost of your home, up to the specified limit you choose. This means that the coverage will pay to rebuild your home as it was prior to the flood damage.
  • For your home’s contents, you get the actual cash value of the belongings. This takes into account depreciation, which means older items are reimbursed at lower amounts.
  • Certain personal items like furniture or basement contents may have their own limits.

You can get good flood coverage through the NFIP directly or from private insurance companies that partner with the NFIP. The government sets the rates and coverage limits for flood insurance. Here are the amounts that NFIP provides coverage up to:

  • $250,000 for your home’s structure
  • $100,000 for personal belongings

Some homeowners purchase excess flood insurance, which covers damages beyond the NFIP limits. Excess flood insurance is available from many insurance companies—like Safeco, known for positive customer service and wide access to home insurance across the United States.

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Do I need flood insurance?

If you live in a high-risk flood zone, you absolutely need flood insurance. In fact, in the U.S. nearly every homeowner in a high-risk area is required to buy flood coverage. In addition, flood zones and their risk of disaster change over time, so it’s crucial that you know whether you live in one.

Even if you don’t live in a designated flood zone, you may still want to purchase flood insurance, especially if you’re at risk for any of the following potential flood causes:

  • Melting snow
  • Overflowing creeks and ponds
  • Downhill water from heavy rainfall

Almost anyone can purchase flood insurance, but it’s an especially good idea for homeowners in risky areas.

What flood insurance covers

Flood insurance coverage is broken down into two categories: (1) your home’s property and structure and (2) your personal property. Here’s what the NFIP allows for coverage:

Property and Structure

  • Building and foundation
  • Debris removal
  • Electrical and plumbing systems
  • Heating, ventilation, and air-conditioning systems
  • Water heaters
  • Major and built-in appliances such as refrigerators, dishwashers, and cooking stoves/ovens
  • Permanently installed carpet, flooring, wall paneling, cabinets, and window blinds
  • Garages (up to 10 percent for detached garages only)

Contents and Personal Belongings

  • Clothing
  • Curtains
  • Furniture and electrical equipment
  • Portable equipment such as window-unit air conditioners and microwave ovens
  • Washers and dryers
  • Freezers and their contents
  • Some valuable items up to $2,500

What flood insurance doesn’t cover

  • Living expenses, including temporary housing
  • Cash and financial documents like bond certificates
  • Trees, plants, and other property outside the building
  • Business expenses or financial losses
  • Cars, motorcycles, and other vehicles (with some exceptions)
  • Mildew and mold damage that occurs after the flood

Most flood insurance also limits coverage for areas below ground and the homeowner’s belongings in those areas. This includes basements and crawl spaces.

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How much does flood insurance cost?

Rates are set by the government, and the average cost for flood insurance is about $700 per year. However, prices vary depending on coverage limits and whether you buy a policy that includes your personal possessions. If you choose to purchase excess flood insurance that goes beyond NFIP limits, you’ll pay more.

Because rates and coverage for flood insurance don’t vary between insurance companies, you’ll want to choose the company with the service and that best fits your needs. Here are the companies we think offer the best home insurance. Or, check with  your existing home or auto insurance carrier—if they offer flood insurance—and you may even get a discount for bundling multiple policies with one company.

How to get a flood insurance quote

Whether you’re a homeowner or renter, if you live in a flood zone, you can get coverage. Call [mapi-phone /] to talk to an Obrella-approved licensed agent about adding flood insurance to a new home insurance policy. Or you can ask a licensed agent to see if you can add flood insurance to your current insurance portfolio.

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