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Am I Covered for Flood?

It's important to know whether you're home is covered for flood

How high's the water, Mama? This question was asked by country legend Johnny Cash in the song of the same name. If you don't know the song, check it out here: https://www.youtube.com/watch?v=jI7M2ELPtro.

We're not trying to scare you, but the Cash song illustrates how quickly a flood can occur, and how devastating it can be. And if you think you can sit back, live on a flood plain, and assume that your homeowners insurance policy will cover you if your home should end up underwater, you could be very wrong.

Am I Covered?

Don't assume that you are. A typical homeowners insurance policy will cover you against numerous types of damage, but if you have heavy rain, a hurricane or other type of storm, or a broken levee, you may need specialized insurance. And in terms of natural disasters, floods are the most common cause of damage to homes in the United States.

Will the Government Help?

The federal government, in order to protect people from flood-related losses, created the NFIP (National Flood Insurance Program) under the auspices of FEMA (the Federal Emergency Management Agency). The NFIP partners with approximately 90 private insurance companies to provide flood insurance to householders, business owners and renters if their community takes measures to reduce the risk of flooding.

FEMA identifies certain zones as being at high risk for flooding. Mortgage lenders typically require flood insurance in high-risk areas, but may not in areas that are identified as being at moderate risk. If you're in a moderate-risk area, you'd be well advised to buy flood insurance even if your lender doesn't require it.

How Much Does Flood Insurance Cost?

The cost varies, but rates don't usually differ all that much from company to company. Any number of factors can affect the cost of flood insurance, including how much coverage you buy, where you're located, and the type of home you own.

Ideally, to find out how much flood insurance will cost, you should speak with a licensed agent who can help you to determine the premium for your property, and help you take advantage of any discounts that might be offered with your homeowners insurance policy.

Types of Coverage

Flood insurance covers two types of property - buildings and contents. You will not be able to buy flood insurance for the land that your dwelling occupies.

Typically, building policies start at $20,000 coverage, and go up to $250,000. They cover your electrical system, your plumbing system, your shelves and cabinetry, your appliances, and any carpeting that's installed over unfinished flooring. They also cover removal of debris that was deposited due to the flood.

If you buy contents coverage, you'll be covered for carpeting that wasn't included in your building policy, your curtains, air conditioners, freezers and the food they contain, portable appliances, artwork and furs.

Contents coverage begins at $8,000 and goes as high as $100,000. Ideally, you should make an inventory of your home's contents so that you can be assured of being properly reimbursed for the loss of the contents of your home.

What Isn't Covered

It's important to know what isn't going to be covered under your homeowners insurance policy. Flood insurance will not cover you for sewer or drain backup, overflow or discharge from a sump pump, or damage due to mold or mildew if you could have avoided it. Usually, in low areas like basements or crawlspaces, any damage will not be covered.

Keep This in Mind

Just because you don't live on a flood plain, that doesn't mean that a flood can't happen. Perhaps there's a dam upriver that could break. With climate change, heavy rains have been occurring in areas that historically didn't have to worry about flooding. Realistically, each and every homeowner should carry flood insurance. The premiums aren't all that high, and as is the case with most types of homeowners insurance, it's something that you buy hoping that you'll never have to use.