What Does Flood Insurance Cover?

What Does Flood Insurance Cover?

Flood insurance usually covers your home's structure and contents up to the limits of your policy. Here's a closer look at flood coverage.

Structure coverage typically includes:

• Electrical and plumbing systems
• Furnace and water heater
• Built-in kitchen appliances
• Permanently installed carpet, cabinets, paneling, bookcases and blinds
• Foundation walls and staircases
• Detached garages

Coverage for personal possessions generally includes:

• Clothing
• Furniture
• Electronics
• Washers and dryers
• Microwaves
• Window or portable air conditioners
• Valuable items such as furs or art

Flood insurance coverage for items in a basement may be limited. For example, air conditioners, washers, dryers, freezers, furnaces, hot water heaters and sump pumps in a basement must typically be connected to power to be covered.

Most flood insurance is sold through the National Flood Insurance Program (NFIP), which limits structure coverage to $250,000 and personal property coverage to $100,000 ($2,500 for valuables). Structure coverage and contents coverage are sold separately. Contents coverage only pays the current cash value of the items, not the cost of replacing them with comparable new ones.

Tip: If you'd like more coverage than the NFIP offers, you can buy additional flood insurance from private insurers.

Learn more: Does Home Insurance Cover Natural Disasters?

What Does Flood Insurance Not Cover?

Flood insurance generally doesn't cover the following:

• Property outside of your home, such as swimming pools, hot tubs, fences, decks, patios, septic systems and landscaping
• Additional expenses of living elsewhere during home repairs
• Cars and other self-propelled vehicles (flood damage to cars is usually covered by comprehensive car insurance)
• Damage due to shifting soil
• Sewer, drain or sump pump backup not directly caused by the flood
• Mold, moisture or mildew damage not directly caused by the flood
• Destroyed documents or money
• Home improvements to finished basements
• Couches, televisions, photographs and personal property stored in basements

Tip: Renters insurance doesn't cover flood damage, but renters can buy flood insurance to protect their possessions through the NFIP or private insurance carriers.

Learn more: Does Homeowners Insurance Cover Water Damage?

Do I Need Flood Insurance?

Your lender may require you to have flood insurance if your home is mortgaged and you live in a high-risk area. If it's not required by your lender, the decision to buy flood insurance depends on where you live, your budget and how comfortable you are with risk.

You can use the Federal Emergency Management Agency (FEMA) flood map to check your home's flood risk. Keep in mind, the NFIP reports that 40% of flood insurance claims occur in low- to moderate-risk zones, and FEMA says a single inch of water could do $25,000 in damage to your home.

Even if you're not in a high-risk zone, purchasing flood coverage may make financial sense. Flood insurance covers damage from flooding caused by heavy rainfall, melting snow and ice, broken dams or water mains, tsunamis, mudflow or the aftermath of wildfires and hurricanes. These dangers exist in many areas you may not consider a high flood risk.

Learn more: How Much Homeowners Insurance Do You Need?

How Much Does Flood Insurance Cost?

The median price of NFIP flood insurance is $1,290 per year for a single-family home with a replacement cost value of $425,297, according to the most recent FEMA data. The cost of flood insurance may vary depending on factors such as your region's risk level, the amount and kind of coverage you buy and the way your home is constructed.

If you live in one of the more than 1,500 communities that participates in FEMA's Community Rating System (CRS), you may qualify for premium discounts ranging from 5% to 45%. CRS communities have taken steps to reduce flood risk. You can encourage officials in your community to participate if they're not already doing so.

You may also qualify for discounts on flood insurance if you make changes that lower your risk, such as moving your HVAC system or water heater out of the basement to higher ground or installing flood vents in crawl spaces and basements.

Learn more: Factors That Impact the Cost of Homeowners Insurance

How to Get Flood Insurance

You can typically get flood insurance from the insurance company that provides your homeowners, auto or renters insurance. If your current insurance company doesn't sell flood insurance, you can visit the NFIP website to find insurers that do and get a flood insurance quote.

All insurance carriers that work with the NFIP charge the same rates for flood insurance, so you don't need to compare prices. However, if you're shopping for extra flood coverage above the NFIP limits, you'll want to compare quotes from several insurance companies to make sure you're getting the best rates. Keep in mind there's generally a 30-day waiting period before an NFIP flood insurance policy goes into effect.

Tip: Flood insurance deductibles may be a dollar amount or a percentage of your home's insured value; there's usually a separate deductible for possessions. Increasing your deductible may lower your premiums.

The Bottom Line

As extreme weather events become more common, flooding can strike almost anywhere. Flood insurance fills gaps in your homeowners insurance to protect your home and possessions. Insurers in some states can check credit-based insurance scores when setting flood insurance prices. These scores differ from consumer credit scores, but are based on much of the same information, so checking your credit score could indicate where your credit-based insurance score stands.

Could your credit score use improvement? The same behaviors that may help improve your credit score can positively impact your credit-based insurance score, which might save you money on flood insurance.