Flood Insurance

It often comes as a surprise to people that their general homeowner’s insurance policy covers water damage but does not cover floods. While most people would tend to lump those two types of calamity together, insurance policies treat them as two entirely separate risks– one of which is always covered and one of which is only covered if a flood policy is added to the normal insurance package.

The great difference between flood policies and water damage insurance is basically that water damage occurs when something inside the structure of the home fails. In other words, an icemaker line breaks and fills the basement with four feet of water or the roof leaks and damages the ceiling in the upstairs bathroom. Flood events are caused by external factors not related to the structural integrity of the home. If the dam breaks upstream or a hurricane parks itself over your town for a week, a lot of water from an externally-generated source is going to come thundering down on your house and it is going to get flooded– no matter how sturdily built it is.

While flood insurance is often associated with people who live in coastal areas subject to hurricanes or down in river bottoms vulnerable to spring runoff, it is available at a very affordable price to anyone anywhere in the country, no matter where they live. Surprisingly, many communities that have recently been devastated by hurricanes show very low percentages of homeowners who carried flood coverage. Nationwide, the number is only about 12%, while places like recently-devastated Houston only got up to about 18%.

The Federal government’s National Flood Insurance Program (NFIP) generally offers $250,000 coverage for structural damage to your home and up to $100,000 for loss of personal items contained within. Since even the most arid areas of the country have been known to suffer tremendous downpours at irregular intervals, the NFIP is a very affordable ounce of prevention that can mean the difference between being wiped out by a freak cloudburst or of being able to rebuild without worries. It’s definitely something to think about in a world increasingly subject to strange weather patterns.