Flood insurance covers damages to your home as a result of flood waters. This insurance also covers losses of the contents of your home. These are two different policies that are purchased separately. Buildings are covered for replacement cost, but coverage for personal contents is reimbursed on a cash value basis.
Flood damage is not covered under a standard homeowner’s policy. Automobiles with damage are covered under automobile insurance.
This flood coverage is for any person who owns or rents a home. This includes condominiums and residential apartment buildings up to four units. Renters don’t own their dwelling but may purchase insurance coverage for their contents.
Flood coverage requires a standard 30-day waiting period after the first premium is paid. General guidelines for building coverage include the foundation, permanent carpeting, built-in appliances, furnaces, plumbing systems, and other permanently attached items. Guidelines for personal contents generally include washers and dryers, clothing, artwork, food, curtains, and furniture.
Property generally not covered are items such as precious metals, hot tubs, swimming pools, decks, and other outdoor belongings.
The National Flood Insurance Program (NFIP) is managed by FEMA and has limits on building and contents coverage.
NFIP insurance will cover residential buildings for $250,000 and contents for $250,000. NFIP will cover commercial property for $500,000 and its contents for $500,000. Communities that enforce a floodplain management plan to reduce future flood damage are eligible for this government-sponsored insurance.
Private market flood policies may be purchased to cover property value exceeding the limits of the NFIP coverage. One benefit with private market insurance is a feature called rate-lock for up to three years.
The most significant benefit of having flood damage reimbursement in place is that tens of thousands of dollars in damage can be caused by less than 12 inches of water. Also, enormous amounts of water can inundate your home and neighborhood because of severe weather many hundreds of miles upstream.