Why Even YOU May Need Flood Insurance 🌊

How to Protect Your Home (and Not Break Your Budget) Series

Our 4-week series is a must-read for every homeowner. Once you buy a home, the responsibility is all yours! But are you truly prepared for the unexpected? This series is a handy guide on everything from homeowner’s insurance to keeping your home safe — and avoiding costly mistakes.

This week we’re talking about flood insurance. Even if you don’t live near water, it might be something you need. Don’t wait until it’s too late!

Why Flood Insurance Matters

Think you’re “low-risk” and don’t need flood coverage? Think again.

Even a home outside a FEMA-designated floodplain can experience flood damage, and most standard homeowner’s insurance policies don’t cover floods. A separate flood insurance policy could save you tens of thousands in repairs and replacements. For example, a six-inch flood in a 2,000-square-foot home could cause around $40,000 in damage (NFIP).

What Is Flood Insurance?

Flood insurance is a separate policy from your standard homeowner’s insurance. You can get coverage through a private insurer or via the National Flood Insurance Program (NFIP).

• Building coverage protects the structure of your home.
• Contents coverage protects your belongings.

Policies usually have a 30-day waiting period, so don’t wait until the storm hits! Coverage limits: $250,000 for buildings and $100,000 for contents (with options to increase for higher-value homes).

What Counts as a “Flood”?

Flood insurance has a specific definition:

• Water or mud affecting normally dry land
• Must impact two or more properties, or two or more acres of land if only your property is affected

Damage from wind-driven rain or a single flooded basement doesn’t count, so keeping gutters clean and proper yard drainage is still important.

Common Causes of Flood Damage

Flooding can happen anywhere — not just near rivers or lakes. Urban development, heavy rainfall, spring storms, and poor drainage can all contribute to water damage in homes.

How Is My Flood Insurance Rate Determined?

Flood rates are set by the NFIP. Your premium depends on:

• Age of your home
• Number of floors and construction type
• Elevation and location of the lowest floor
• FEMA-determined flood risk

Lower risk = lower premiums. Check your flood zone using the FEMA Flood Map Service Center.

Is Flood Insurance Required?

• High-risk areas: Required if you have a mortgage through a federally regulated lender.
• Low/moderate-risk areas: Not required but strongly recommended. Almost 25% of claims come from these areas.

You might qualify for a Preferred Risk Policy, which offers the lowest premiums through NFIP.

What Flood Insurance Covers

Building coverage: Structure, foundation, plumbing/electrical systems, central AC, furnace, water heater, certain appliances, permanently installed flooring, paneling, cabinets, and debris removal.

Contents coverage: Clothing, furniture, electronics, curtains, portable appliances, washers/dryers, freezers and food inside, and artwork (up to $2,500).

Limited coverage: Basements, crawl spaces, and areas below the lowest elevated floor.

Not covered: Trees, plants, walkways, decks, patios, fences, hot tubs, cars, living expenses, money/currency, and preventable damage like mold.

What About Federal Aid?

Federal disaster aid is only available after a federal disaster declaration. And it’s usually a loan, not a grant. Having your own flood insurance means you’re protected no matter what.

For more details, check FloodSmart.gov to learn more and find an agent near you.

Next week is the final part of our How to Protect Your Home (And Not Break Your Budget) Series. We’ll cover how to budget for maintenance and avoid common homeowner mistakes — because a little planning now can save you big later!