Flood Insurance: Coverage Beyond Homeowners Insurance

Flood Insurance

Asset Protection

Optional Coverage

Property Insurance

Alice Yao | Updated August 21st, 2020

Flood damage can really wreak havoc in a residential area. Flood water will not only seep through every corner of the homes, but it will also cause damage to floors and walls and leave behind significant aftereffects such as mold and mildew.

It is important to know that homeowners insurance does not cover water damage caused by floods. 

If you live in a flood zone or are concerned about potential flood, flood insurance can be purchased through a government backed program called National Flood Insurance Program (NFIP) as part of the Federal Emergency Management Agency, more commonly known as FEMA.

In this article, we will cover flood insurance in these main topics:

Flood water is high enough to partially bury a road sign.

Common causes of flood damage

According to NFIP, flood is an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.

For many people living near a river, lake, or coastal front, flooding can be a frequent occurrence as part of the natural phenomenon of seasonal changes. 

However, risk of flood exists for those who live further inland as well, especially in developed residential areas where large amounts of water have nowhere to recede.

Below are some common causes for flooding that are not exclusive to flood zone:

  • Heavy rain or downpours
  • Ruptured water mains
  • River overflowing
  • Dam or levee breaks
  • Storm surge or tsunamis
  • Melting ice and snow

Understanding flood zones and risks

FEMA has developed an official map called Flood Insurance Rate Map (FIRM) that displays different flood risk zones and high risk flood areas known as Special Flood Hazard Areas (SFHA).

To find out if your home is in SFHA or other flood risk zones, you may enter your address in the FEMA website: https://msc.fema.gov/portal/search.

Note that more information will only show under the displayed map if your home is located in a flood risk zone.

High risk areas

Zones that are designed in letters starting with A or V are SFHA.

If your home is located in SFHA, your mortgage lender will require you to have flood insurance. In the process of obtaining flood insurance, you will be asked to provide a document called Elevation Certificate. 

Elevation Certificate is an official standardized NFIP form that documents important details of your home including various measurements of your house. This document can only be completed by a licensed professional land surveyor or engineer.

Before spending money to complete the certificate, there are a few ways to check if an existing certificate is already available:

  • Contact your city to see if there is already an Elevation Certificate available for your address.  
  • Check with the seller, builder, or developer to see if there is already a copy on file. 
  • Look in your property deed. In many cases, the certificate is already included as part of the deed.

Moderate to low risk areas

Zones that are designated in letters starting with B, C, and X are moderate to minimal flood risk areas.

Homes that are located in these areas typically are not required to carry flood insurance by mortgage lenders.

Open kitchen with white cabinets next to dining area.

What is covered by flood insurance?

Flood insurance policies are regulated by NFIP and the coverage options on these policies do not vary with different insurance companies. There are two types of coverage in flood insurance: building coverage and contents coverage.**

Building coverage offers protection for:

  • Electrical and plumbing systems
  • Furnaces and water heaters
  • Refrigerators, cooking stoves, and built-in appliances like dishwashers
  • Permanently installed carpeting
  • Permanently installed cabinets, paneling, and bookcases
  • Window blinds
  • Foundation walls, anchorage systems, and staircases.
  • Detached garages
  • Fuel tanks, well water tanks and pumps, and solar energy equipment

Contents coverage offers protection for:

  • Personal belongings such as clothing, furniture, and electronic equipment
  • Curtains
  • Washer and dryer
  • Portable and window air conditioners
  • Microwave oven
  • Carpets not included in building coverage (e.g., carpet installed over wood floors)
  • Valuable items such as original artwork and furs (up to $2,500)

What are not covered by flood insurance

According to the NFIP website, these items are not covered by building or contents coverage**: 

  • Temporary housing and additional living expenses incurred while the building is being repaired or is unable to be occupied
  • Property outside of an insured building. For example, landscaping, wells, septic systems, decks and patios, fences, seawalls, hot tubs, and swimming pools
  • Financial losses caused by business interruption
  • Currency, precious metals, stock certificates and other valuable papers
  • Cars and most self-propelled vehicles, including their parts
  • Personal property kept in basements

Coverage limits and deductibles

Under a flood insurance policy, your home is covered up to:

  • $250,000 for building
  • $100,000 for contents

Flood insurance policy deductibles start at $1,000 and can go as high as $10,000. Each coverage has its own deductible and is applied separately in claim payouts.

Keep in mind that like all insurance policies, the higher the deductible you choose, the lower the premium will be. 

Where do I get flood insurance?

There are more than 50 insurance companies across the country that are approved providers in the NFIP flood insurance program. It is highly likely that your current insurance agent can help you get coverage with one of those companies.

If you prefer, you may also use this search tool provided by NFIP to find a flood insurance provider: https://www.floodsmart.gov/index.php/flood-insurance/providers

We always recommend working with your personal insurance agent to discuss your situation in detail. Working with an insurance agent is the best way to make sure you are adequately and properly covered.  

*https://www.fema.gov/flood-zones 
**https://www.floodsmart.gov/flood-insurance/coverage

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