Flood Insurance
A separate policy that covers physical damage caused by flooding—not included in standard homeowners policies.
Flood damage is explicitly excluded from standard homeowners insurance policies, regardless of the cause (heavy rain, storm surge, overflowing rivers, or sewer backup). To cover flood losses, homeowners must purchase a separate flood insurance policy, most commonly through the federally operated National Flood Insurance Program (NFIP) or private flood insurers.
NFIP policies cover up to $250,000 for the dwelling structure and up to $100,000 for personal property. Private flood insurance may offer higher limits, broader coverage (including basement contents and loss of use), and sometimes lower premiums in lower-risk zones. Mortgage lenders require flood insurance for properties in FEMA Special Flood Hazard Areas (Zone A and Zone V).
Premiums vary enormously by flood zone and elevation. A property at high flood risk may pay $2,000–$10,000+ per year; a low-risk property may pay under $600. NFIP policies have a 30-day waiting period before they take effect (with limited exceptions), so purchasing before the rainy season is essential.
Real-World Example
Despite three feet of water in her house after a hurricane, the homeowner's standard policy paid nothing because flooding is excluded; her NFIP flood policy covered $115,000 in structural damage.