What Does Flood Insurance Cover?

What Does Flood Insurance Cover?

Published: June 17, 2013

To understand what flood insurance covers, you need to know three things first:

1. Standard homeowners insurance doesn’t cover flood damage at all. It’ll cover some damage from rain, but if your home is filled with water as a result of rising bodies of lakes, rivers, streams, and oceans, it won’t cover you.

2. The most common flood insurance is offered through the federally regulated program known as the National Flood Insurance Program (NFIP). It has two policies:

  • One that covers your actual home (building property) up to $250,000
  • One that covers your personal property up to $100,000

You can buy one or both.

Related: What happens if you need more than $250,000 worth of coverage? You need to get excess flood insurance, which is only offered by private companies, not the Feds.

3. You might have to buy it. If you’re taking out a mortgage on a property that’s in a high-risk zone (also called a Special Hazard Flood Area), your lender will require you to buy a policy in order to get the loan. If you just want to buy policy, you have to make sure your community participates in the national flood program. Flooding affects every state, so you’re probably eligible.

Related: Should You Buy Flood Insurance?

What the Federal Flood Insurance Program Covers

NFIP’s building property policy covers the cost to rebuild or the actual value of your home (whichever is less). That includes:

  • Your home and its foundation
  • Electrical and plumbing systems
  • HVAC equipment like air conditioning, furnaces, and water heaters
  • Kitchen appliances, including your refrigerator, stove, and built-ins such as your dishwasher
  • Permanently installed carpeting over an unfinished floor
  • Permanently installed wallboard, paneling, bookcases, and cabinets
  • Window blinds
  • Detached garages (limited to 10% of your home policy)
  • Debris removal
  • Water heater

The NFIP policy that covers your personal property will cover stuff like:

  • Clothing, furniture, and electronic equipment
  • Curtains
  • Window AC units
  • Portable microwaves and dishwashers
  • Carpets not covered by your building policy
  • Washer/dryers
  • Your freezer and frozen food
  • Up to $2,500 in valuables, such as art and furs

Note: Personal possessions claims are paid based on actual cash value — not what you paid for them.

What Isn’t Covered

Typically, if it belongs in a bank or safe deposit box, it’s not covered:

  • Precious metals
  • Stock certificates
  • Bearer bonds
  • Cash

Other items not covered:

  • Trees
  • Plants
  • Wells
  • Septic systems
  • Walkways
  • Decks
  • Patios
  • Fences
  • Hot tubs
  • Swimming pools
  • Boat houses
  • Retaining walls
  • Storm shelters
  • Temporary housing and other living expenses
  • Loss of income
  • Cars
  • Post-flood mold damage (more about insurance and mold here)
  • Sewer backups

Coverage is Limited for Basements

If you have a basement, you’ll have more risk because the NFIP limits coverage for basements, crawlspaces, or any living space where the floor is below ground level. Even a walkout basement won’t be covered for:

  • Bookcases
  • Window treatments
  • Carpeting, tile, and other floor coverings
  • Some drywall, depending on how far below ground level it is
  • Paneling
  • Walls and ceilings not made of drywall
  • Most personal property such as clothing, electronic equipment, kitchen supplies, and furniture

There’s a Limit to How Often You Can Collect

If you make four or more flood claims for more than $5,000 each, or two claims that, added together, cost more than your home, NFIP will “offer” you a grant to make your home less vulnerable to floods. If you refuse to take the grant money and make the improvements, your policy payments will probably increase substantially.

If a Flood Severely Damages Your Home

NFIP may give you $30,000 to use to raise, tear down, or move your home. That $30,000 gets added on to any other claim NFIP pays you. But the total still can’t go above $250,000.

How Much Does It Cost?

The average cost is about $600 for a one-year premium; your insurance company, which issues the policy, can give you a quote. Ultimately, the amount depends on such factors as the amount of coverage, deductible, the risk level of your flood zone, and the age of the building.

More About What Qualifies as a Flood

As mentioned earlier, regular homeowners insurance doesn’t cover floods. So when is damage considered to be caused by a flood?

  • Water has to cover at least 2 acres of land that’s normally dry, or has to have damaged two or more properties (one being your home).

Also, the water has to come from:

  • Overflowing inland or tidal waters
  • Unusual, rapid accumulation or runoff of surface waters from any source
  • Mudflow (that’s mud carried by a flow of water, creating a river of mud)

You’re also covered when shorefront land collapses or sinks due to waters above “anticipated cyclical levels.”

Water and seepage that comes from sewer or drain backups, or a sump pump that overflows is not considered a flood.


  • Don’t wait for an impending storm to purchase federal flood insurance. There’s usually a 30-day waiting period. Some private policies offer a 15-day waiting period.
  • Make an inventory of the possessions in your home to make filing a claim easier.





Should You Buy Flood Insurance?

Should You Buy Flood Insurance?

Published: June 19, 2013

If you have a mortgage on your home and you live in a high-risk flood zone, in most cases, your lender requires you to buy flood insurance.

However, if you live in a moderate- to low-risk zone, and your community belongs to the National Flood Insurance Program (most do), then you have the option of buying it.

If you’re in the latter category, your first question probably is, “How much does it cost?” Federal flood insurance can cost just a few hundred dollars or as much as $10,000 a year, depending on your risk factor.

Some other facts that can help you make up your mind:

Your Homeowners Insurance Doesn’t Cover Flood Damage

It only covers water falling from the sky. Once water touches the ground and enters your home, it’s a flood, and only flood insurance will pay for the damage.

For example, if a tree limb pokes a hole in your roof during a rainstorm, and rainwater damages your ceiling and floor, that’s covered by your homeowners insurance. But if heavy rain causes the creek in your neighborhood to overflow into your home, that’s covered only by flood insurance.

To be more precise, the National Flood Insurance Program uses this definition of a flood:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow.

Everyone Lives in a Flood Zone

It’s just a matter of how much risk of flood there is. The NFIP can tell you your home’s exact risk of flooding. But in a nutshell, zones A and V are high risk areas. Moderate- to low-risk areas are zones B, C, and X. If you’re in zone D, the risk isn’t clearly known because it hasn’t been mapped yet. But you still can purchase flood insurance. The zones are used to help determine policy rates.

More Than 20% of Flood Insurance Claims Come From Moderate-to-Low Zones

That’s 1 out of 5. And that’s not counting homeowners who weren’t insured and, therefore, couldn’t file claims. No one knows how many uninsured there are, although only 18% of homeowners have flood insurance.

You Can’t Count on Government Aid

Government aid comes largely in the form of loans, which you will have to repay. Before you can even qualify for a loan, your area has to be declared a federal disaster area, and federal disaster assistance is declared in less than half of all flooding events.

The Average Flood Claim is $30,000

But if you live where the water rises so high that emergency responders have to cut roof holes to rescue people, your potential flood loss could be quite a bit higher.

Cost of damage to a 2,000-sq.-ft. home by 6 inches of floodwater:

Finished floor, wood, carpeting $15,870
Doors, base trim, windows $2,150
Electrical, plumbing $320
Cleaning $2000
Kitchen and bath cabinets $4,500
Appliances $180
Washer, dryer $150
Repairs to furnace/AC $270
Bedroom furniture $1,800
Kitchenware and food $330
Living room furniture $2,700
Computer accessories $1,100
Media equipment $150
Accent furniture and accessories $450
Personal items $650
Total $39,150
1,000 sq. ft. home is $20,150

If You Decide You Want to Purchase Flood Insurance

To get an idea of how much coverage you’ll need, create a home inventory and then estimate the cost of repairing or rebuilding your home. Together, those two figures are your total potential loss.

A federal flood policy would cover rebuilding costs up to $250,000. You can also get a NFIP to cover up to $100,000 in possessions. One or both of those.

What Flood Insurance Covers

If your home would cost more than $250,000 to rebuild, you have to buy a private flood insurance policy called “excess coverage” to insure the value of your home above $250,000. Ask your insurance agent for options.

Questions to Ask Your Agent

FEMA’s online flood map locator can estimate your premium and help you find an agent who sells federal flood insurance in your community.

When you talk to an agent, make sure you get answers to these questions:

  • What will and won’t be covered?
  • Are there additional expenses or agency fees?
  • Will my policy insure me for the actual cost of replacing items, or just what the items are valued at?
  • Can my zone change, and therefore, my rates? The NFIP is reworking its maps, which is resulting in some potential rate changes.





The Right Disaster Insurance for Your Region

The Right Disaster Insurance for Your Region

Published: June 20, 2013

The region in which you live dictates what kind of disaster insurance you might need to protect your home from Mother Nature’s wrath.

Real estate comes down to location, location, location. Same goes for disasters. Where you live offers clues to how susceptible your home is to damage by floods, tornadoes, hurricanes, earthquakes, wildfires, and other calamities.

These regional risks also indicate whether you need to consider purchasing supplemental disaster insurance to cover claims that wouldn’t be included under a typical homeowners policy. Determining if you live in a disaster-prone region and reviewing your existing coverage are good first steps.

The next step is to create a home inventory, ideally with a digital camera or camcorder. Store copies of those files far away from your house or online at a backup storage site. That way, even if your home and computer are damaged, you’ll have proof of what was lost. Remember, too, to devise a family evacuation plan and assemble an emergency kit with food, water, and supplies.


Homes in low-lying areas, near bodies of water, or downstream from dams are particularly vulnerable. Saturated carpet, insulation, and drywall can promote mold growth. Since flood damage is often excluded from homeowners policies, it’s important to weigh the risk to your property.

At-risk regions: All

Coverage: Find out if your homeowners policy differentiates between “falling water” flooding — heavy rain, which may be covered — and “ground water” flooding, which usually isn’t. Most insurers sell flood insurance, but it may be more difficult to get in high-risk regions. The National Flood Insurance Program is open to anyone. Most experts recommend insuring your home and its contents at the replacement value.

Cost: The average flood insurance policy costs $600 per year, while the average flood claim is $30,000, according to the NFIP.


Damage from hurricanes can result from heavy winds, rain, hail, and tidal or groundwater surge. Insurers in areas that have been battered by storms — especially coastal regions in the Southeast — are more skittish than those in other areas.

At-risk regions: Primarily East Coast and Gulf Coast

Coverage: In low-risk areas, your homeowners policy may cover any damage not done by rising water or groundwater surge. In high-risk areas, you may need to purchase additional coverage or participate in a state-run pool for hurricane and windstorm coverage. Your state’s insurance commissioner can provide details. Be sure to check whether additional hurricane coverage includes flooding from tidal or groundwater surge, or if you need a separate flood policy.

Cost: David Miller, CEO of Brightway Insurance in Jacksonville, Fla., says he has seen comprehensive windstorm and flood policies range from $300 for low-risk areas to up to $20,000 for high-end homes in the riskiest communities.


Although earthquakes are associated with California, fault lines run through virtually every region. The U.S. Geological Survey tracks the latest quakes and keeps maps that show existing fault lines. Even minor earthquakes can damage belongings and leave houses structurally unsound.

At-risk regions: West Coast, especially California, and parts of Midwest

Coverage: Homeowners policies typically exclude earthquake damage. In California, supplemental coverage is available through the California Earthquake Authority. In other states, it’s usually available from private carriers. Your state’s insurance commissioner will have information on options.

Cost: A typical earthquake policy runs between $1.50 and $3 per $1,000 of coverage per year, with a deductible of 5% to 15% of the home’s value. If a home is insured for $200,000, the deductible would be $10,000 to $30,000, possibly with separate deductibles for the structure and the contents.


Winds can reach up to 300 miles per hour and spiral into violent funnels. Although there’s not much that can be done to guard against tornadoes, keeping a home’s exterior in good repair can help mitigate damage from high winds.

At-risk regions: Eastern U.S, especially Central Plains

Coverage: Tornadoes are typically covered under your homeowners insurance. However, it’s a good idea to read over your policy or call your agent for confirmation.

Cost: Homeowners insurance premiums in recent years have averaged about $800 annually.


Approximately 68,000 wildfires burned more than 9.3 million acres in 2012. Every state but Hawaii was hit. Areas that are experiencing drought are most at risk. Damage to homes can result from flames themselves, but also from smoke, soot, and even the water used to fight the fires.

At-risk regions: All

Coverage: Fire is typically covered by a standard homeowners policy. Be sure to verify exactly what your coverage entails. Is cleanup included? How about full replacement value?

Cost: In recent years homeowners policies have averaged as low as $477 (Idaho) to as high as $1,409 (Texas).

Mine subsidence

Homes built over or near abandoned mines are at risk of structural damage if the ground shifts or sinkholes develop. Mine subsidence can also affect the water supply and utilities in the area.

At-risk regions: Primarily Eastern U.S.

Coverage: Mine subsidence isn’t typically covered by homeowners insurance. Coverage is usually available through state-sponsored pools, so check with your state’s insurance commissioner.

Cost: Premiums vary. In Pennsylvania, $130,000 in residential coverage is about $7 per month. In Illinois, it costs less than $95 per year to insure a house worth up to $250,000.




An Eco-Friendly Home That Really Gets Around

An Eco-Friendly Home That Really Gets Around

Published: November 13, 2012

We love eco-minded concept houses, like this energy-efficient creation that resembles a giant caterpillar.

This self-supporting abode was dreamt up by Michael Jantzen, an architect known for his imaginative conceptual works, especially when it comes to alternative energy and storage systems.

His Transformation House is a design concept that truly lives up to its name. The structure literally alters its appearance to take advantage of weather conditions.

The cylindrical building’s exterior is divided into five sections that automatically, or manually, move so it can catch energy from the sun to power it, let the wind in to cool it, and collect rainwater for its inhabitants.

That makes it a self-supporting home with one-of-a-kind curb appeal: Every time one of the five sections rotates, it alters the building’s caterpillar-like appearance.

And it’s not just the exterior that moves. Everything inside this home can be shuffled around.

The windows move 360 degrees so you can tweak your views at the push of a button. The interior also cleverly maximizes space by storing four containers, each one being a room, under the glass floors.

That’s especially convenient if you want to hide a messy room — just store it away and call up a clean one.

If you want to see more of Jantzen’s work, you can visit his site.

By: Deirdre Sullivan © Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®


Why Gardening is Good for Your Heart

Why Gardening is Good for Your Heart

Published: December 10, 2012

Gardening and cholesterol-lowering drugs cut death risk in high-cholesterol adults.

Gardening not only is good for your soul, it’s good for your heart.

That’s the conclusion of a new Veterans Affairs Medical Centre study that shows combining cholesterol-lowering drugs (statins) with moderate exercise (gardening) lowers the chance of premature death more than either drugs or exercise alone.

The study, conducted with more than 10,000 U.S. veterans with high cholesterol over 10 years, showed that participants who were fit and taking statins cut their risk of death over that decade by 70%, far better than participants who exercised without drugs (50%). Veterans who didn’t exercise or take statins increased their risk of death by 35%.

Best part: It doesn’t have to be strenuous. Moderate exercise, like gardening or walking, is enough to increase the ability of statins to stave away the grim reaper.


By: Lisa Kaplan Gordon © Copyright 2015 NATIONAL ASSOCIATION OF REALTORS®