Homeowners Insurance Information

Does my Homeowners Insurance cover flooding?

Standard homeowners policies generally DO NOT cover flooding. Flood coverage is purchasable directly through your homeowners insurance agent. However, the policy is also provided by the Federal Flood Insurance Program (800-427-5593, http://www.floodsmart.gov/floodsmart/pages/index.jsp).

Replacement cost coverage is generally available for the structure of your home, but only actual cash value coverage is available for possessions damaged or destroyed during a flood. Replacement cost coverage pays to rebuild your home as it was before the damage. Actual cash value is replacement cost coverage minus depreciation, meaning the older your possessions are, the less you will get if they are damaged. There may also be limits on coverage for furniture and other belongings stored in basements.

The Federal Flood Insurance Program only provides limited coverage. If you require more coverage than the federal program allows, additional coverage known as excess flood insurance is available from specialized insurance companies. Depending on the amount of coverage purchased, an excess flood insurance policy will cover damages above the limits of the federal program, with a disbursement guidelines similar to those of the federal program—replacement cost for the structure and actual cash value for the contents.

Flood insurance is available for renters as well. Flood insurance should be considered if you live in a designated flood zone, but it also should be added to your coverage to protect against the possibility of flooding due to melting snow, overflowing creeks or ponds or water running down a steep hill. Don’t wait for a flood season warnings on the evening news to buy a policy—most plans require a buffer of 30-day before they take effect.

Excess flood insurance is generally available in the parts of the country where the Federal Program is available—low risk areas, as well as high risk flood zones along the coast and close to major rivers. It can be purchased from specialized companies, through independent insurance agents or from regular homeowners insurance companies that have arrangements with a specialized insurer to provide coverage to their policyholders.

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Information provided with permission from the Insurance Information Institute, Inc.