What Is Flood Insurance, and What Does It Cover?
Flood insurance covers water damage from heavy rain, melting snow and overflowing bodies of water.
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Most homeowners and renters policies won’t cover flood damage, so people at risk need separate flood insurance.
Flood insurance covers damage from scenarios such as heavy rainfall, overflowing bodies of water and hurricane storm surges.
Flood insurance pays to repair the structure of your home and replace damaged personal belongings.
Most home insurance policies don’t cover flood damage, which can cost you thousands of dollars even if there's just an inch or two of water. To protect yourself financially, consider buying separate flood insurance coverage. Here’s how it works.
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What does flood insurance cover?
Flood insurance covers specific kinds of water damage to your home and belongings. The nation’s biggest flood insurance provider, the National Flood Insurance Program, defines flooding as “an excess of water on land that is normally dry.”
Flood insurance covers scenarios such as:
A river, lake or bay that overflows its banks.
A hurricane storm surge.
A heavy downpour that accumulates faster than it can drain.
A mudflow.
Melting snow that seeps into your home.
Homeowners, condo, renters and mobile home insurance policies generally don’t cover flood damage. So if your home is at risk of flooding, you’ll usually need to buy this coverage separately.
Although they won’t cover flood damage, homeowners and renters policies do cover some types of water damage. Examples include burst pipes and appliances that suddenly spring a leak. Learn more about homeowners insurance and water damage.
Types of flood insurance coverage
The NFIP offers two types of flood insurance — building and contents — each with a separate deductible. A deductible is the amount of a claim you’re responsible for paying.
Building coverage
Building coverage is insurance for the structure of your home. (It’s similar to dwelling coverage on a homeowners policy.) It pays for flood damage to things like:
Electrical and plumbing systems.
Water heaters.
Furnaces.
Foundation walls.
Built-in appliances and cabinets.
Permanently installed carpets.
Detached garages.
Fuel and well water tanks.
Solar energy equipment.
Staircases.
Window blinds.
The NFIP offers building coverage up to $250,000.
Contents coverage
Like personal property coverage on a homeowners or renters policy, contents coverage pays for damage to your belongings. On an NFIP policy, this includes:
Clothing.
Furniture.
Electronics.
Valuable items like original artwork or furs (up to $2,500).
Curtains.
Washers, dryers and microwaves.
Portable air conditioners.
Carpets installed over wood floors.
The NFIP covers your stuff on an “actual cash value” basis. This means that if you file a flood insurance claim, your payout will reflect what your belongings were worth at the time of the flood.
Here’s an example: If floodwaters damage your 15-year-old recliner beyond repair, your policy will pay enough to buy a used recliner of similar age and quality — not enough for a new one. Multiply this type of gap by every item in your home, and you may find that your insurance payout isn’t nearly enough to replace what you lost.
NFIP policies offer up to $100,000 of contents coverage.
Flood insurance coverage beyond the NFIP
You may be able to get broader coverage and higher limits by buying flood insurance through companies that don’t work with the NFIP.
For example, Neptune offers building coverage up to $4 million and contents coverage up to $500,000. Meanwhile, Chubb’s limits go up to $15 million total for your home and belongings. Both companies can cover your belongings on a replacement cost basis — so you could replace your old, flood-damaged recliner with a brand-new one.
Learn more about private flood insurance.
What doesn’t flood insurance cover?
The standard NFIP policy won’t cover certain expenses, including:
Some water damage
The NFIP pays for damage only when naturally occurring flooding affects at least 2 acres or two properties. That means it won’t cover scenarios such as an overflowing bathtub that floods your bathroom. (Your homeowners insurance may cover that problem.)
Damage to certain items and parts of your home
The NFIP won’t pay for flood damage to any of the following:
Swimming pools and hot tubs.
Decks.
Patios.
Landscaping and fences.
Wells and septic systems.
Valuable papers.
Currency.
Most of your basement
When it comes to basements, the NFIP’s flood insurance coverage is minimal. As noted above, it’ll pay for damage to major appliances such as central air conditioners, water heaters, washers and dryers. But your policy won’t cover things like furniture, electronics, finished floors, bathroom fixtures or generators.
If you have a finished basement, you may want to look into private flood insurance as an alternative to the NFIP.
Living expenses if you can’t stay at home
If you need to move into a hotel or rent an apartment while contractors repair your home after a flood, you’ll have to pay those expenses yourself.
Vehicles
NFIP insurance won’t cover cars or other “self-propelled vehicles.” However, if you have comprehensive insurance on your auto policy, that coverage should pay for flood damage.
Private insurers tend to offer more coverage options and fewer exclusions. For instance, Neptune and Aon Edge can cover some expenses if you need to move out of your home during repairs. They also pay for swimming pool repairs or cleanup.
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Is flood insurance required?
Some people have to buy flood insurance. For example, many mortgage lenders require homeowners in high-risk flood zones to have flood insurance in order to get a loan. And if the federal government has given you grants or other flood assistance in the past, you may be required to have flood insurance to qualify for similar aid in the future.
If you don’t fit the categories above, you don’t have to carry flood insurance. However, even a small amount of flooding could cost you thousands of dollars.
If you’re not sure how likely your home is to flood, there are a couple of places you can check. First, visit the Flood Map Service Center from the Federal Emergency Management Agency. Type in your address to see whether your home is located within a Special Flood Hazard Area, according to the federal government.
A Special Flood Hazard Area is a place with at least a 1% chance of flooding in a given year.
Another tool to try is the website for a private company called First Street, which uses climate change data to measure flood and other risks. Enter your address at the top of the homepage to see your home’s risk of flooding, wind, wildfire, severe heat and air pollution.
To learn more about how to assess your home's flood risk, see Do I Need Flood Insurance?
How much flood insurance do I need?
The flood insurance coverage you need depends on the size and structure of your house and the value of your belongings. For example, you may need more coverage if you live in a sprawling one-floor ranch than if your home has two stories and half your possessions are above the reach of most floods.
An insurance agent can help you figure out how much building coverage to buy. Meanwhile, a home inventory is a good way to assess the value of your belongings.
If the NFIP doesn’t offer enough coverage, ask your insurance agent about excess flood insurance to fill the gap. Excess insurance generally offers identical coverage to your NFIP policy but with higher limits that kick in once you’ve exhausted your NFIP coverage. It's available from private companies such as Wright and SWBC. A local insurance agent can help you find options in your area.
Alternatively, you can skip the NFIP and look for private flood insurance with higher limits.
How much is flood insurance?
The average federal flood insurance policy costs about $899 a year, according to NerdWallet’s analysis. You could pay significantly more or less depending on where you live, the size of your home and other factors.
To learn more and see the average flood insurance premium in your state, see How much does flood insurance cost?
How flood insurance works
Flood insurance works like many other insurance policies: As long as you pay your premiums, the insurance company will provide financial help if a covered event happens. In this case, the covered event is a flood.
In order to get a payout, you’ll need to file a claim with your flood insurer. You can usually do this by calling the company or agent who sold you the policy. You’ll need to report the date the flood happened and provide details about the damage.
The insurance company will typically send an adjuster to your home to inspect the property and document the damage. They’ll then determine whether you have coverage under your policy. (For example, if you have only building coverage, the insurance company won’t pay for damage to personal belongings such as furniture or clothes.)
Once the insurance company verifies your coverage and the extent of the damage, it will send a payout that you can use to make repairs or replace lost items. Any deductibles that apply will be subtracted from your claim payout.
How to get flood insurance coverage
You have several choices for buying flood insurance. The NFIP works with about 50 insurers to sell its policies, so you may be able to get flood insurance from the same company that offers your auto or homeowners coverage.
You must live in one of the thousands of communities that participate in the program to buy an NFIP policy. (Here’s information on participating communities.)
If NFIP insurance isn’t available in your area, look for private flood insurance companies. Even if you do have access to NFIP insurance, you may be able to get lower rates from a private insurer. A local independent agent can help you shop around.
Don’t wait until a hurricane is barreling down on your home to get covered. There’s typically a waiting period between when you buy flood insurance and when the coverage takes effect. For NFIP policies, the waiting period is usually 30 days, while other policies can have shorter periods of 10 to 14 days.
You may want to give your insurer an elevation certificate to see if it can help lower your premium. An elevation certificate is a document stating the lowest floor elevation of your home, which the insurer will use to determine your home’s flood risk. FEMA used to require elevation certificates for some property owners to get coverage, but this is no longer the case.
You can get an elevation certificate from your local flood plain manager or hire a land surveyor or engineer to complete one for you.
NerdWallet used the National Flood Insurance Program’s most recent “Policy Information by State” report to calculate the average cost of flood insurance in each state and across the country. To determine the national average, we divided the total written premium for all communities across the U.S. by the total number of policies in force.
Rates are based on both residential and non-residential policies.
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