Your Home Insurance Doesn’t Cover Flooding — And More Hurricanes Are Coming

Virginia Brown
Virginia Brown

With the incoming threat of multiple hurricanes and tropical storms, flood insurance is a necessity that should not be overlooked — especially since even the best home insurance usually doesn’t cover it. But even though it’s a safe bet for peace of mind, according to the Insurance Information Institute, many people living in flood-prone areas have not invested in this type of coverage, which can safeguard multiple parts of your property from damages caused by storm surges or flash floods.

Read on to find out why flood insurance can be a good investment to protect your household against hurricane damages, what it covers, how much it costs and what you need to do to file a claim.

Should You Invest in Flood Insurance?

Flooding is the most common—and most costly—natural disaster in the U.S. Just one inch of water in your home can cause over $25,000 in damage, according to the Federal Emergency Management Agency (FEMA), without including the lasting effects of physical and emotional turmoil as well. 

This is why some homeowners are required to purchase flood insurance if their house is in a high risk area. However, even those who own properties inland should be wary of floods. As pointed out in a map of areas at risk for flash floods published by the National Weather Service, storm-related floods can extend for many miles inland. In fact, one in four flood insurance claims, come from outside high-risk areas, according to FEMA. 

[ Read: Is Hurricane Damage Covered by Flood Insurance? ]

Flood insurance isn’t included in most home insurance coverage — the numbers just don’t add up for insurance companies, and there ends up being more people paying than collecting. If you own a home or business property in a high-risk flood area and you have a government-backed mortgage, you’re required to have flood insurance, according to FEMA. While flood insurance is not required if you live outside of the high-risk area, check with your lender anyway — they may require you to carry flood insurance, too.

Even if coverage isn’t required, flood insurance is still a small price to pay for the peace of mind it can offer, especially to citizens in hurricane-prone areas. Note that most policies take about a month to provide coverage, once purchased, so planning ahead is probably the best course of action.

What Types of Flood Insurance Are Available and What Do They Cover?

The National Flood Insurance Program (NFIP) partners with dozens of insurance companies and independent insurance agents to offer a couple of different types of coverage: building property, which protects your home, and personal property, sometimes called “contents,” which covers what’s inside.

Building property coverage covers the actual structure of the property, including its electrical and plumbing systems, your refrigerator, blinds, carpeting, water heaters, central air conditioners, heat pumps, and sump pumps. Personal property covers your clothing, furniture, microwaves, and televisions. 

Neither policy type covers damage that was deemed preventable, like anything that was caused by moisture, mildew, or mold. Some items that are not covered include currency, precious metals and papers, like stock certificates. The policies also won’t cover exterior items, like your pool, fence, or landscaping.

How Much Does Flood Insurance Cost?

The cost of flood insurance is based on a number of factors, including your property’s flood risk. It also takes into account what the policy covers and how much coverage you have. 

According to FEMA, most homeowners pay less than $400 annually in areas with low- to moderate-risk, though the average annual flood insurance premium is about $700 (and higher if your property is in a high-risk area).

How To File a Flood Insurance Claim

Time is of the essence when a flood occurs. Be sure you report your loss to your insurance agent or carrier immediately. Call the NFIP at 877-336-2627, if you need help finding your carrier.

Once you initiate the process, an insurance adjuster will assess damages, albeit remotely during the COVID pandemic. Be sure you have detailed information about your damage before you get rid of anything, like the carpet. You should also have a detailed inventory of your property and its contents prior to a flood occurring. 

The Bottom Line

The NOAA predicts that flooding due to sea-levels rising will continue into 2021. If you choose to forgo coverage, know that federal disaster assistance comes in the form of loans, which must be paid back with interest, or grants, which average just about $5,000 per household. The average flood insurance claim in 2018, though, was more than $40,000. If you’re in a hurricane-prone area or a coastal town, consider investing in flood insurance. It could save you time, money, and heartache in the future.

(Photo by Henrik Sorensen / GettyImages)