Covered or Not? Homeowners Insurance May Come Up Dry in a Flood

For savvy shoppers, few things are more frustrating than arriving at the register with a 20 percent discount offer in-hand, only to learn that the discount doesn’t apply to the item you want to purchase. Now, imagine yourself as one of the thousands of homeowners to experience a catastrophic flood. You attempt to file a claim on your homeowner’s insurance policy, only to learn that flood is not a covered loss. This kind of experience would be frustrating and possibly financially devastating for any homeowner. However, it could have been less painful and costly with a good flood insurance policy.

According to FEMA records from 2010 to 2018, the annual cost of flood damage nationwide was approximately $17 billion, a staggering figure that puts many home and business owners in a dangerous position. And unfortunately, too many property owners think they have protection against the peril of flood under their homeowner’s insurance policies; they do not.

A standard homeowner’s policy provides coverage for damages caused to your home and personal property. This coverage can be essential to protect a home against damage caused by multiple types of perils like fire. But, it does have exclusions, and things get a little trickier when it comes to water-related damages. A homeowner’s policy can protect your home from some water-related types of damage, like a burst pipe or rainwater coming through the roof (read your policy to determine coverage). However, homeowner’s policies do not typically provide coverage for water damage caused by a flood.

For flood coverage, property owners should obtain a separate flood policy. Flood policies are sold and administered by both the private market and the federal government’s National Flood Insurance Program (NFIP).

Typically, due to a lack of understanding, the NFIP is often the first or only flood product presented to property owners by agents. However, NFIP policies come with several drawbacks. For example, the NFIP utilizes outdated information, which can cause an inaccurate and often overpriced rate. In addition, the NFIP caps coverage for homeowners at $250,000. With longer waiting periods for coverage to start, and a more difficult claims process in the event of a flood, the government program can be fraught with complications.

Conversely, private flood insurance uses high-tech risk assessments that can typically offer a homeowner more competitive rates. They also often provide more comprehensive coverage, substantially higher coverage limits, and condensed waiting periods.

As floods continue to threaten property owners nationwide, it’s important to get educated about flood insurance and make sure your property is properly protected. A homeowner’s insurance policy is critical in protecting your home against a variety of risk exposures, but it likely will not protect you in the event of a flood.

So, review your policy and understand your property’s unique flood risk. Then, get your free, online quote at and make sure you have the protection you need in the event of a flood.

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