Does My Homeowners Insurance Cover Floods?

Some of the most common perils covered by a standard homeowners insurance policy include financial losses resulting from:

• Fire
• Smoke
• Windstorms
• Hail
• Explosions
• Lightning strikes
• Vandalism
• Theft
• Damage from aircraft, cars or other vehicles

Two perils, however, not covered by standard homeowners insurance policies are floods and earthquakes. In order to be covered for financial losses due to either of these two natural disasters, you must have extra, specialized coverage added to your standard homeowners protection. While adding flood insurance is an option for most homeowners to consider, but not required, there are certain homes where the purchase of flood insurance is required.

When is Flood Insurance Required

As a homeowner, you may be required to carry flood insurance if:

1. Your home is in a high-risk flood area and your mortgage is held by a lender that is federally regulated or insured. Even if your home is in a low or moderate-risk flood zone, your mortgage lender may still have a flood insurance requirement.
2. If you have previously received a federal disaster assistance grant from FEMA following a Presidential Disaster Declaration, you'll need to maintain flood insurance in order to qualify for any future federal aid of this type.

Where to Get Flood Insurance

While some independent insurance companies may offer you flood insurance coverage, most homeowners buying flood insurance get it through the National Flood Insurance Program (NFIP), which is overseen by FEMA, the Federal Emergency Management Agency. According to FEMA, floods are the most common natural disaster occurring in the U.S. and more than 20% of the flood claims submitted come from areas that are outside of a high-risk flood zone. They state that no home, no matter where it's located, is totally risk free from being affected by a flood.

While most flood insurance comes through the NFIP, you don't actually buy your coverage from them but through a regular insurance agent or broker. To determine your degree of risk from flooding, you can consult a flood zone map from FEMA. Go here to learn the flood risk for any address in North Carolina.

To Buy or Not To Buy

Flood insurance is a relatively inexpensive add-on to your standard homeowners insurance coverage, particularly if you live in a low-risk or moderate risk flood zone. As little as one inch of flood water in your home can cause as much as $25,000 in damage. Consider the risk.