Floods are among the most common hazards in the US, resulting in billions in damage every year. Some are slow to form, while others will leave you homeless in minutes. If you live in flood-prone areas, you know that homeowners insurance is useless when a flood destroys your property. You need to purchase flood insurance to supplement your homeowners insurance so that you can be sure that you are fully covered in the event of a flood.


What exactly is flood insurance?
Flood insurance covers a house for losses caused by water damage resulting from rising bodies of rivers, lakes, dams, streams, and oceans.

Unlike homeowners insurance or hazard insurance, flood insurance only covers losses resulting from flooding. Homeowners insurance covers most other losses that are not related to flooding such as fires, theft, vandalism, among others.

Flood insurance is usually underwritten by the National Flood Insurance Program (NFIP). The NFIP was founded in 1968 to address the lack of flood insurance in the private market. Flood insurance is available for all properties determined to be in flood-prone areas by the National Flood Insurance Program.


What is a flood zone?
The Federal Emergency Management Agency is in charge of keeping the United States flood zone maps up to date to keep everyone in the know about which areas are most likely to experience floods and when.

Flood zones are areas that are known to experience flooding as a result of predictable weather events. Flood zones are broken up into various subsections for rating purposes. For instance, properties located in zone A are at high risk of flooding while those in zones B, C, or X run a low risk of flooding.


Is Flood Insurance Required?
If you live in Zones B, C, X, or other low-to-moderate risk areas, flood insurance is not required under law, but you need it to be on the safe side.

If you live in a high-risk zone, you may have to buy flood insurance if you are taking out a mortgage on the property.


What is covered by Flood insurance?
Flood insurance has two types of policies:

a) The first one covers the building for up to $250,000. It covers the actual value of your home or the cost of rebuilding:

- The building and foundation.

- HVAC equipment like furnaces, air conditioning, and water heaters.

- Electrical and plumbing system.

- Kitchen Appliances, including the fridge, stove and other built-in appliances such as the dishwasher.

- Permanently installed paneling, wallboard, cabinets, and bookcases.

- Permanently installed carpeting over unfinished floors.

- Detached garages.

- Window blinds.

- Water heater.

- Debris removal.


b) The other one covers personal property for up to $100,000. This includes things like:

- Electronics, furniture, and clothing.

- Curtains.

- Portable dishwashers and microwaves.

- Washers/dryers

- Curtains not covered by the building policy.

- The freezer and frozen food.

- Window AC units.

- Up to $2,500 for valuables, such as furs or art.

You may purchase either of the two policies, but it is recommended to have both.



What is not covered by a flood insurance policy?

a) Mold/mildew damage

b) Currency or precious metals.

c) Paper valuables such as stock certificates.

d) Living expenses like alternative accommodation.

e) Outdoor property such as fences, decks, landscaping, patios, wells, septic systems, hot tubs, or pools.

f) Cars.