Flood Insurance

What Does Flood Insurance Cover? Getting a flood insurance for your home gives your home more protection and you have peace-of-mind in return. Flood isurance is among the most impotant aspects of insurance that homeowners are expected to get. 

The reason is that having this insurance policy will enable a homeowner protect his/her home against some unforeseen circumstances that may occur.

Flood Insurance

It’s very important to state here that for many homeowners, flood insurance is an essential extra layer of protection.

Interestingly, adding flood insurance to your insurance package means you’re covered if groundwater rises and floods your home—a situation that isn’t usually covered by home policies.

Why flood insurance?
Here’re some of the reasons why flood insurance might be a must-have by every homeowner. We agree with the National Flood Insurance Program—everyone should have flood insurance, especially if you’re in an area that has a high flood risk. You might even be required to have it if you’re at high risk.

Here’s why the National Flood Insurance Program (NFIP) recommends flood insurance to everyone: 

Read: Cheap Insurance For Young Drivers

The situations that cause flooding—heavy rain, melting snow, severe coastal weather—can happen anywhere. In fact, one in five flood insurance claims comes from someone in a low—or medium-risk area.

Most of your house is covered; what isn’t? 
Generally, most of your house is covered by flood insurance.

Specifically, the core parts of your home—like the foundation and the systems that keep it running—are covered.

So are appliances. Carpeting and personal belongings are generally covered, too, unless they’re in the basement.

Flood insurance: One price, wherever you go 
Unlike most other insurance coverages, your flood insurance policy will cost you the same, no matter where you get it. This is good news if you prefer not to shop around.

The reason flood insurance costs you the same is that it’s a national program backed by the federal government (via the National Flood Insurance Program).

So, however you buy it, it’s ultimately coming from the same place.

What Does Flood Insurance Cover?
To answer this question, let me quickly say here that to understand what flood insurance covers, you need to know three things. Listed below are those three things you need to understand in order to know what flood insurance covers;

1. Standard homeowners insurance doesn’t cover flood damage at all. It’ll cover some damage from rain, but if your home is filled with water as a result of rising bodies of lakes, rivers, streams, and oceans, it won’t cover you.

2. The most common flood insurance is offered through the federally regulated program known as the National Flood Insurance Program (NFIP). It has two policies:
– One that covers your actual home (building property) up to $250,000
– One that covers your personal property up to $100,000

You can buy one or both.

3. You might have to buy it. If you’re taking out a mortgage on a property that’s in a high-risk zone (also called a Special Hazard Flood Area), your lender will require you to buy a policy in order to get the loan.

If you just want to buy policy, you have to make sure your community participates in the national flood program. Flooding affects every state, so you’re probably eligible.

What the Federal Flood Insurance Program Covers 
NFIP’s building property policy covers the cost to rebuild or the actual value of your home (whichever is less). That includes:
– Your home and its foundation
– Electrical and plumbing systems
– HVAC equipment like air conditioning, furnaces, and water heaters
– Kitchen appliances, including your refrigerator, stove, and built-ins such as your dishwasher
– Permanently installed carpeting over an unfinished floor
– Permanently installed wallboard, paneling, bookcases, and cabinets
– Window blinds
– Detached garages (limited to 10% of your home policy)
– Debris removal
– Water heater

The NFIP policy that covers your personal property will cover stuff like:
 – Clothing, furniture, and electronic equipment
– Curtains
– Window AC units
– Portable microwaves and dishwashers
– Carpets not covered by your building policy
– Washer/dryers
– Your freezer and frozen food
– Up to $2,500 in valuables, such as art and furs

Note: Personal possessions claims are paid based on actual cash value — not what you paid for them.

What Isn’t Covered
Typically, if it belongs in a bank or safe deposit box, it’s not covered:
– Precious metals
– Stock certificates
– Bearer bonds
– Cash

Other items not covered:
– Trees
– Plants
– Wells
– Septic systems
– Walkways
– Decks
– Patios
– Fences
– Hot tubs
– Swimming pools
– Boat houses
– Retaining walls
– Storm shelters
– Temporary housing and other living expenses
– Loss of income
– Cars
– Post-flood mold damage
– Sewer backups

Coverage is Limited for Basements 
If you have a basement, you’ll have more risk because the NFIP limits coverage for basements, crawlspaces, or any living space where the floor is below ground level. Even a walkout basement won’t be covered for:
 – Bookcases
– Window treatments
– Carpeting, tile, and other floor coverings
– Some drywall, depending on how far below ground level it is
– Paneling
– Walls and ceilings not made of drywall Most personal property such as clothing, electronic equipment, kitchen supplies, and furniture

More About What Qualifies as a Flood 
As mentioned earlier, regular homeowners insurance doesn’t cover floods. So when is damage considered to be caused by a flood?

Water has to cover at least 2 acres of land that’s normally dry, or has to have damaged two or more properties (one being your home).

Also, the water has to come from:
– Overflowing inland or tidal waters
– Unusual, rapid accumulation or runoff of surface waters from any source
– Mudflow (that’s mud carried by a flow of water, creating a river of mud)

You’re also covered when shorefront land collapses or sinks due to waters above “anticipated cyclical levels.”

Water and seepage that comes from sewer or drain backups, or a sump pump that overflows is not considered a flood.

Source of data: houselogic

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