Floods can happen anywhere. With the climate shifting and weather becoming more and more erratic, it is hard to predict when or where a flood will strike. For many homeowners, flood insurance is an undoubtedly necessary protection against the loss of property or belongings due to floods.
A flood policy is a form of protection that homeowners can buy to recoup their losses from damage to the home and their personal property from a flood. In the United States, there is a program called the National Flood Insurance Program (NFIP) that provides protection through FEMA to property owners in participating communities. You can also purchase a policy through private insurance agencies if your community does not participate in the NFIP.
Homeowners with a mortgage are always required to own a homeowners insurance policy, but a flood policy is not required. However, those who live in a high-risk area will be required to own a flood policy.
Those interested in purchasing a flood policy should be educated in what it does and does not cover. It does cover overflow of inland or tidal waters, unusual and rapid accumulation of runoff water, and mudflow. It does not cover earth movement. Examples of earth movement include landslides, earthquakes, sinkholes, and any other kind of ground erosion.
There are only a few variations in flood policies in which you may extend coverage to personal property. The maximum amount you can insure your personal property for is $100,000 for a residential home. Interestingly, the maximum amount a policy will cover for damage to the home is $250,000. For many parts of the country, this is more than enough; however, in areas with an extremely high cost of living (the coastal lines), this does not cover the entire value of the home.
Flood policies have unquestionable value to anyone who has been in a flood. While floods are hard to predict, it is always better to be safe than sorry.