Should You Have Flood Insurance

reasons to have flood insurance

Don’t wait until disaster strikes to determine whether you have the right insurance coverage should your home be damaged or lost in a flood.

Although floods are the nation’s most common and costly natural disaster, causing millions of dollars in damage annually, many people don’t realize that homeowners’ policies typically cover water damage only in limited instances.

According to the Insurance Information Institute, standard homeowners’ and renters’ policies don’t protect you in the event of flood damage. For flood protection, you need to purchase flood insurance coverage through the National Flood Insurance Program (NFIP). The program aims to reduce the impact of flooding on private and public structures by providing affordable insurance to property owners and encouraging communities to adopt and enforce floodplain management regulations.

You can find out whether or not you’re required to get flood insurance by checking the risk of your property flooding in FEMA’s Flood Insurance Risk Maps. If you live in a flood plain, your mortgage will require you to buy flood insurance. If you have no mortgage, no other entity can require it. Congress has mandated federally regulated or insured lenders to require flood insurance on mortgaged properties located in areas at high risk of flooding.

Flood insurance is a federally backed insurance rate for a given property, which should be the same with every agent and company providing flood policies. Flood insurance can only be purchased through an insurance agent, though. You cannot buy it directly from NFIP.

You also can consider optional flood insurance, even if it’s not required. “After all, more than 20 percent of claims for flood damage compensation actually come from properties outside high-risk flood areas,” says Daniel Bates, a certified agent at Bates Insurance Agency. “And, if you’re a renter, look into renters’ flood insurance. Your landlord’s insurance for your rental home won’t cover the loss of your possessions.”

Before You Buy Flood Insurance

  • It’s important to note that flood insurance has a 30-day waiting period before coverage begins.
  • You may be eligible for bundled insurance discounts.
  • The maximum coverage is $250,000 for a structure and $100,000 for contents.
  • When you shop for insurance look for policies with building ordinance coverage or purchase a separate rider because your homeowner’s policy may pay to rebuild your home after a storm, but not cover the cost of meeting upgraded building requirements.

For more information about NFIP and Flood Insurance Risk Maps, visit

“Talk with an insurance agent who understands the complexities of flood insurance,” Bates says. “It is best to have the coverage that you need in the event of a flood.”