Flood Insurance
Plain English
Flood insurance is a separate policy for damage from rising water, such as an overflowing river, storm surge or heavy rain flowing into the home, which most homeowners policies don't cover. Federal NFIP policies cover the building up to $250,000 and belongings up to $100,000, and usually start 30 days after you buy.
Read to the end to complete this term.
On this page
Definition
Flood insurance is a separate policy that covers damage from flooding, which most homeowners policies exclude. In the United States it's available through the National Flood Insurance Program, run by FEMA, and from private insurers. NFIP building coverage goes up to $250,000 and contents coverage up to $100,000.
Why It Matters
Flooding is one of the most common and costly disasters, and it's excluded from most homeowners and renters policies. Lenders require flood insurance for homes in designated high-risk zones, but floods happen outside them too.
Real-World Example
Imagine heavy rain sends water into a home's ground floor, damaging walls, floors and furniture. The homeowners policy excludes flood. The NFIP flood policy pays for the building damage under building coverage, up to its limit, and the furniture under contents coverage, if the owners bought it, each less its deductible.
Common Misconceptions
- Assuming homeowners insurance covers flooding.
- Buying building coverage only and expecting belongings to be covered.
- Waiting for a forecast storm to buy it, given the usual 30-day wait.
Key Takeaways
- FEMA: "Most homeowners insurance does not cover flood damage."
- NFIP "Building policies cover up to $250,000 of flood damage" and contents policies "up to $100,000 of flood damage for belongings kept inside your home."
- A new NFIP policy generally takes effect 30 days after purchase, with exceptions such as buying it with a mortgage, per FEMA.
- The Texas Department of Insurance notes that if your home is in a designated flood zone, your lender requires flood insurance, "But floods can happen anywhere."
Frequently Asked Questions
Do I need flood insurance outside a flood zone?
It's not required by lenders there, but floods can happen anywhere. Many people outside high-risk zones buy it.
What's it commonly confused with?
Water backup coverage, which is a homeowners endorsement for water backing up from drains, not outside flooding.
Related Terms
Related Coverages
- Flood Insurance
Related Scenarios
Explore the rest of the Flood Insurance category.
Browse Flood Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- Buy a flood insurance policyFEMA, National Flood Insurance Program (FloodSmart)
- FloodSmart: The National Flood Insurance ProgramFEMA
- Home insurance guideTexas Department of Insurance
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.