Home Insurance and Flood Insurance: What’s the Difference?

House damaged by floodWhen a homeowner discovers water in his home, the first thought that may come to mind is, “Will my insurance cover this?” That depends on a couple of things. How did the water enter your house? And what insurance policy or policies do you currently have?

There are two types of insurance policies that cover different kinds of water damage. Here is an explanation of the two policies, how they work, what they cover, and how to get them.

Homeowners Insurance

Flooding is not covered in a homeowners insurance policy. However, there are some water damage situations where a typical homeowners policy will cover the cost of damages. The difference lies in how the water enters your home. To fall under homeowner’s insurance, the water must enter your home before it hits the ground, while the opposite is true for flood insurance – the water must hit the ground before it enters your house. Examples of the former are:

* heavy rains damage your roof.

* broken water pipes damage your home.

* hail breaks windows, allowing water to enter the house and cause damage.

Furthermore, even when a homeowners insurance policy does not cover water damage caused by flooding, it will cover other losses incurred by flooding. For example, if a river near your house overflows, causing you to evacuate and then raccoons or other animals enter the house and cause damage, your homeowners insurance will cover that damage. They just won’t cover the flood. For that you need a separate flood insurance policy.

Flood Insurance

If you live in a flood zone and believe your home could potentially suffer water damage through flooding, you may want to consider a flood insurance policy to complement your homeowners insurance policy. If you are unsure whether or not your home lies in a flood prone area, contact your county planner to know for sure.

Written by the National Flood Insurance Program, your flood insurance policy will cover damage caused by a flood – up to the policy limit. Some examples of flooding typically covered by flood insurance include:

* floods caused by hurricanes and tropical storms.

* an overflowing river that invades your home.

* flash flooding that causes water or mud to enter the home.

* Unusually heavy rains that cause flooding because the ground can’t soak it up fast enough.

You can easily purchase flood insurance through your local Federal Emergency Management Office (FEMA), an insurance company, or an insurance agent. If you live in a flood prone zone, the possibility of incurring thousands of dollars of damage from just a few inches of flood water is a reality.

Furthermore, flood insurance isn’t just for homeowners. Renters and business owners can also protect their belongings and property with flood insurance. Costs vary according to each individual policy and depend on what policy limit you want to purchase and where your property is located – the higher the flood risk usually means a higher premium. But without flood insurance, you face the even greater risk of having both your property and your funds wash away.