Do I Need Flood Insurance?

Hurricanes and fires make headlines, but flooding is one of the more common natural disasters in the United States. According to FEMA, your home can sustain $25,000 in damages from one inch of water inside. That’s why the National Flood Insurance Program (NFIP) exists — and you may need it.

Flood Damage Happens Outside Risk Zones

FEMA reports that around 20 percent of the flood insurance claims filed each year come from places outside high risk zones near bodies of water. When snow melts or excessive amounts of rain fall, the water levels in rivers and lakes rise. This sometimes leads to flooding in areas anywhere in the flood plain, even if the area hasn’t seen a flood in decades.

A more immediate concern for homeowners is broken pipes. If a pipe bursts inside a wall, it can lead to water damage. Mold and mildew can form. The walls and floors can rot. In some cases, the damage can be so severe that you have to move out until it gets repaired.

Homeowner Insurance Policies Don’t Include Flood Coverage

Most homeowner insurance policies specifically exclude flood damage from the coverage. For example, if the property sustains damage from a hurricane, the insurance adjuster notes which damage was caused by the wind and the water. The company then pays to repair only the wind damage, leaving the homeowner to pay for the water damage.

Flood Insurance Pays Without a Declared Emergency

If you have a flood insurance policy, you can file a claim even if you’re not in an area declared a federal emergency disaster area. Having a separate flood insurance policy also offers advantages after a federal disaster. You can file the flood damage claim directly with the insurance company and don’t have to wait for a FEMA grant or a loan.

Flood Insurance May Be Mandatory

If you have a mortgage on your property, the lender may require that you have a flood insurance policy. This protects its investment and reduces the risk that you’ll default on the loan if you have trouble repairing the property. You may also need to purchase a flood insurance policy after you’ve received federal disaster money. The federal agency may be able to refuse future emergency disaster claims if you fail to do so.

How to Buy Flood Insurance

Although you cannot directly purchase flood insurance from the National Flood Insurance Program, you can buy it through authorized agents. The database NFIP maintains can refer you to a local agent who can assist you. The agent can answer questions for you so you can choose the type of coverage that best works for your needs, taking your home and geographical area into account.