Flood insurance covers damage from rising water, storm surge, and similar flood events. No standard homeowners policy, anywhere in the country, covers flood; it is always a separate policy, most often through the federal National Flood Insurance Program (NFIP), or in some markets, a private flood carrier.
Why is flood always a separate policy?
Because flood risk does not fit the way a standard homeowners policy is priced and pooled. Flood insurance runs through its own federal program (NFIP, administered by FEMA) precisely because flood losses are correlated and catastrophic in a way that would be difficult for a standard homeowners insurer to underwrite alongside fire, theft, and liability.
Do I have to be on the water to need flood insurance?
No, and this is where people get caught. FEMA flood maps place many properties outside the highest-risk zones, but heavy rain, storm surge, and creek or river flooding reach far beyond the waterfront. Nationwide, more than 40% of flood insurance claims come from outside the highest-risk flood zones.
When is flood insurance mandatory?
Flood insurance becomes mandatory in one common situation: if a home has a federally-backed mortgage and sits in a FEMA-designated Special Flood Hazard Area (SFHA), the lender is required to make the borrower carry flood insurance. Outside that specific situation, flood coverage is not legally required, but the underlying flood risk does not go away just because it is not mandated.
How fast does flood coverage start?
NFIP flood policies typically have a 30-day waiting period between purchase and the day coverage takes effect. Buying flood insurance the week a storm is forecast is too late; the policy will not be in force when the water arrives.
For example, one inch of floodwater can cause roughly $25,000 of damage to a home, a loss a standard homeowners policy will not pay for no matter how comprehensive it otherwise is.
A free coverage review can help confirm whether a home's flood risk and mortgage situation call for an NFIP or private flood policy.
Sources
FEMA/NFIP; National Flood Insurance Act, 42 U.S.C. Section 4001 et seq.