Myths vs. Reality! What Flood Insurance Actually Covers

Even shallow floods destroy homes. While often overlooked, flood coverage can be your biggest lifeline. It will save you when the disaster hits. It’s not about whether you live in a high-risk area or a safe zone anymore. Floods can be expected anywhere, so having coverage is crucial. In this blog we will separate myth from reality. Uncovering what flood insurance truly covers.

The Core Misconceptions: Common Flood Insurance Myths

Most people believe their primary homeowners insurance policy will provide flood coverage. Same goes for tenants insurance. And that’s only one example. There are multiple misconceptions about flood coverage that must be clarified!

Myth 1: “My homeowner’s insurance covers flood damage.”

Reality check! Standard homeowner’s policies aren’t designed for flood damage. They only protect you from certain kinds of accidents. Always check your covered perils in insurance policies. Generally covered perils include:

Fire and Smoke
Lightning Strikes
Windstorms and Hail
Explosion
Vandalism and Malicious Mischief
Loss of Personal Belongings Due to Theft
Damage from Aircraft or Vehicles
Falling Objects, Snow, Weight of Ice, or Sleet
Accidental Discharge or Overflow of Water or Steam
Freezing of Plumbing Systems

Although, as mentioned, certain water damages like floods are not covered. Even in the act of God certain events aren’t covered. Typically excluding floods, earthquakes, earth movement, nuclear hazards, and acts of war.

Myth 2: “I don’t need flood insurance because I don’t live in a high-risk flood zone.”

Reality check! Floods can happen anywhere. ‘Low risk’ doesn’t mean ‘no risk.’ In fact, 40% of NFIP (National Flood Insurance Program) claims are made from low-risk areas. From 2013 to 2023, one-third of NFIP flood insurance claims came from areas located outside of current high-risk flood areas.. So, flood insurance is crucial regardless of the risk ratio in your area. However, you can expect lower rates in low risk zones.

Myth 3: “Flood insurance is too expensive.”

Reality check! Flood insurance premiums aren’t a single price everywhere. Price varies based on multiple factors. Some areas even offer the least premium as compared to other places. Further, the initial insurance cost is way less than potential disaster damages.

Myth 4: “I’ll get federal disaster assistance if I flood.”

Reality check! Federal disaster assistance is never enough. Federal aid is not available if a major disaster is declared. Furthermore, it’s in the form of a low-interest loan, not a payout. It’s also often insufficient to cover all damages.

On the other hand, insurance provides direct funds for repair at no extra cost to you. It is enough to cover your expenses, and in some cases, you get ALE (Additional Living Expenses).

The Reality! What Flood Insurance Actually Covers

As the name suggests, flood coverages are specifically designed for major water disasters. Some types of water damage are excluded, though. Here is what flood insurance covers in case of mishaps:

Building Property Coverage:

Flood coverage from NFIP typically comes in two parts. Generally building protection and personal property protection. Talking about buildings, the main structure and its foundation are insured. You can further expect:

Wiring pipes and fixtures
Outlets switches and breaker boxes
Central AC furnaces and water heaters
Window blinds
Detached garages (up to 10% of your coverage)
Debris removal
Foundation walls and staircases
Permanently installed sump pumps
Well water tanks cisterns and the water inside
Fuel tanks and the fuel in them
Solar energy equipment

In short, most of the appliances and belongings permanently attached to your property are covered by flood coverage policies.

Personal Property (Contents) Coverage:

Personal property coverage is separate in the NFIP insurance context. Both coverages can be bought together, though. Generally, personal property coverage include:

Everyday household items like clothes and furniture
Portable and window air conditioners
Clothes washers and dryers
Food freezers and the food inside them
Certain valuable items like art furs and jewelry up to a limit

What’s NOT Covered (Important Disclaimers):

Just like every other insurance policy, flood coverage has its own limitations.

Hotel stays, meals, etc, aren’t part of the coverage.
Usually, vehicles, wells, and swimming pools are excluded.
No coverage for loss of income or business interruption.

Final Verdict

Understanding policy coverage and flood insurance limitations is essential to protecting your home. Additionally, flood coverage is a must-have regardless of your location. It is important to choose a reliable insurance provider. Also, buy premiums that provide ample coverage. However, if you are struggling to find a trustworthy insurer, get Smart Apple insurance quotes. We are professional brokers who help homeowners get the right coverage. So don’t wait till the disaster happens. Contact us today and get affordable flood insurance with ease.