In simple insurance terms, a flood is excessive water on land that is usually dry, affecting two or more acres or two or more properties. Flood water that enters your home can come from heavy rain, overflowing inland or tidal waters, overflowing storm drains, or mudflows.
According to the Federal Emergency Management Agency (FEMA), nearly one-third of flood claims occur outside designated high-risk areas. Unexpected events like damaged drainage systems, broken water mains, or failed river levees can lead to costly flooding where you might not expect it.
Make sure your policies are ready for floods
It’s important to understand what your insurance policies cover before a flood happens. Even a few inches of standing water in the wrong place can cause thousands of dollars in damage.
Home insurance
A typical home insurance policy does not cover damage caused by flooding. In fact, they specifically exclude damage or losses from flooding. You will need to purchase flood insurance from an agent, broker, or the National Flood Insurance Program (NFIP) to have flood coverage.
If you’re buying property in an area with a high risk of flooding, known as a Special Flood Hazard Area, you’ll likely need flood insurance to qualify for a mortgage. But even if you live outside these high-risk zones, flood insurance can still be a smart purchase.
Without flood insurance, you'll have to pay out of pocket for any damage flooding causes. Review your risks, existing policy, and flood insurance options with an agent or broker now to avoid major losses when a bad storm hits.
Renters insurance
If you're renting a home or apartment, your landlord's insurance policy covers the building. It does not include your personal belongings. A standard renter insurance policy does not cover damage or losses caused by flooding. Like home policies, renter policies specifically exclude losses from floods.
To protect your personal belongings, you will need to purchase flood coverage through an agent or broker — sometimes called "difference in conditions coverage" — or a flood policy for renters from the National Flood Insurance Program.
Business insurance
Floods create serious challenges for businesses, from damaged equipment to interruptions in normal business operations. Most commercial property insurance policies do not include flood coverage. You'll need a separate flood policy.
Flood insurance for businesses is available through the National Flood Insurance Program, private insurance companies, and surplus lines insurers.
Auto insurance
If you only have liability insurance on your vehicle, flood damage is not covered. You must have comprehensive coverage to be covered for a flood loss.
Your auto insurance does not cover personal items in your vehicle that are lost or damaged from flooding.
If you have time and it's safe to do so, move your vehicle to high ground if you're alerted to possible flooding. Be mindful that insurance companies can deny flood‑related claims if the damage happens because of careless or intentional actions. To avoid problems with your claim, steer clear of risky behaviors. Don’t drive through flooded roads, leave your windows open during a storm, or try to start your car when it’s sitting in standing water.
The National Flood Insurance Program
Flood insurance is widely available through the National Flood Insurance Program.
There are, however, limits to federal flood insurance. For standard NFIP policies, the limitations include:
- Home insurance: $250,000 on the home, $100,000 on personal property in the home (detached buildings and their contents are not covered)
- Commercial insurance: $500,000 on a building and $500,000 for the contents
If you're a homeowner or business owner and think you need more coverage, you can purchase excess flood coverage to protect your property. Even small businesses may need supplemental coverage.
When NFIP coverage starts
National Flood Insurance Program policies start covering your building 30 days after the policy is written, unless the policy is required for a mortgage.
If you have a policy from a surplus line insurer, your coverage usually starts immediately.
Flood mitigation strategies for your home
Floods are destructive, but there are many things you can do now to limit damage and protect your home. Here are some permanent improvements and small steps you can take:
Structural improvements
These long-term improvements can limit damage from standing water during and after flooding:
- Elevate your utilities, such as your electrical panel, furnace, water heater, and appliances
- Look into flood vents if you don't have them to reduce pressure on your foundation walls during flooding
- Consider a sump pump with a battery backup if you have a basement
- Ask a plumber about backflow valves if you're on a sewer system to keep sewage from coming back into your home during storms
- Consider adding "sewer backup coverage" if your home is on a sewer system; this is not covered by a standard home policy and can be added as an optional endorsement
Exterior maintenance
These simple steps can prevent rising water and heavy rain from getting inside your home:
- Check your gutters and downspouts to ensure water is not pooling around your foundation
- Check the grade around your home and ensure the ground slopes away from it
- Keep some sandbags on hand to create temporary barriers around the low points of the exterior of your home
- Make sure your foundation is sealed and waterproofed to keep water out
Interior upgrades
If you're considering hardening your home against floods or just doing some minor renovations, think about these ideas:
- Repair or replace flooring with water-resistant materials, like tile, if possible
- Use water-resistant drywall when making repairs or renovations
- Elevate electronics and other valuables sitting directly on the floor
- Store paint, oils, and cleaning supplies like bleach in elevated places
- Keep regularly updated documentation, pictures, and videos of your belongings in cloud storage or in an off-site location like a safe deposit box
- If you're alerted to rising floodwaters, move your belongings to the highest level possible in your home
Be financially prepared for floods
Financial planning for disasters is almost as important as making your home more resilient to them. Don't forget to:
- Weigh the cost of not purchasing flood insurance — how much would it cost to rebuild your home and replace your belongings?
- Check all your policies to avoid the painful surprise of finding out you're underinsured after a storm
- Look for local and federal mitigation grants to improve your home's flood resilience
- Even if your vehicle is paid off, consider an auto policy with comprehensive coverage if you don't have enough in savings to replace it after a flood loss