The summer storm season is in full swing, so now is a good time to consider whether or not you need flood insurance. Many people assume that any and all water damage that can occur in and around their home will be automatically covered by their homeowner’s insurance policy, but that is not always the case. Flood damage and water damage are two very different things that are not handled the same way by your insurance. Here’s a little bit of information that all homeowners need to know.
What Does My Homeowner’s Policy Cover?
The average homeowner’s insurance policy covers water damage in your home. Typical sources of such damage would include a burst pipe that leaks water through a wall or floor, damaging neighboring rooms and/or the ceiling of the floor below, or an overflowing toilet that damages a bathroom floor and baseboards. Even storm damage may be covered in a case such as hail breaking a window and allowing rain to come in and damage walls and floors.
On the other hand, rain water that has already touched the ground and then enters your home would not be covered in a homeowner’s insurance policy. Once water has come in contact with the ground, it is now flood water, and a separate flood insurance policy would be needed, otherwise any damage would be an out-of-pocket expense for you. The same is true for water that rises out of creeks, rivers and lakes.
Does Flood Insurance Cover Personal Property?
It does, but you have to purchase the correct policies. Flood insurance is usually purchased from the National Flood Insurance Program (NFIP), a federally regulated program that offers two policies, one that covers your home and another that covers personal property. It is important to know that you must purchase both policies to be fully covered. There are limits to what belongings a policy will cover – for example, cars, decks, pools and landscaping are not covered by either the home or personal property policies.
What is a Flood Zone?
Flood zones are geographical locations determined by the Federal Emergency Management Agency (FEMA), using various risk factors and area histories. If you are purchasing a home in a designated flood zone, your lender will likely require that you purchase a separate flood policy in order for your loan to be approved.
How Much Does it Cost?
The average cost for flood insurance is around $700 for a one-year premium. Your insurance company can give you a more detailed quote specific to your needs, and considering your unique factors such as amount of coverage, deductible, your flood risk level, and the age of your home.
Helpful Tips
Don’t delay in deciding about flood insurance for your home. There’s a 30 day waiting period from initialization of a policy until coverage is active, so you can’t purchase a policy just because a major storm is predicted in the coming days. Also, make sure you have a current inventory of your personal possessions that are covered by a policy to make filing a claim easier should you ever have to use the insurance.