FAQ: Home Insurance vs. Flood Insurance

Most homeowners believe that because they have home insurance, they are protected against flood damage. Unfortunately, this is rarely the case. Home and flood insurance are two completely different things. In general, home insurance is used to protect the contents and structure of a home, and that is not all-inclusive by any means. Floods have to be covered using different insurance.

What types of water damage are covered under each policy?

Flood insurance is pretty basic. In general, it covers damage that is caused to your house as a result of flooding. Home insurance does not cover flood damage, but it may cover water damage. This is where it gets confusing for most people because flooding causes water damage. However, home insurance will usually only cover water damage that is caused by broken pipes.

It is interesting to note, however, that home insurance may protect you against some of the effects of flooding. For example, let’s say your house is flooded. While you are evacuated, people break into your house and steal your belongings. Even though the theft was indirectly caused by the flood, most home insurance policies will cover the items that were stolen. Nothing is ever just black or white; there is always a gray area when it comes to insurance.

Which is most important?

Determining which of the two insurances is most important really depends on your geographic location. In general, home insurance is important no matter where you live. Flood insurance is still important, but it will be more so for certain individuals. If you live by the coast or in low-lying areas, flood insurance is something that you want to consider. This goes for people who live next to rivers and streams; these areas are likely labeled as flood zones.

The Federal Emergency Management Agency has a detailed breakdown of what is considered a flood zone, including a list of special zones. This is also an important website to check from time to time to stay up-to-date with possible flood warnings, as well as other natural disasters that homeowners need to be aware of.

What category does storm insurance fall into?

It is sometimes tricky to pin down what damage an insurance policy covers when it comes to storms. In general, damage caused by wind, hail or a tornado is covered by home insurance. That being said, earthquakes and flooding are generally not covered. If you want your home to be protected from these other natural disasters, it is important to have the right insurance policy.

This brings us to our main point: Always look over your home insurance policy. People think that they are protected from natural disasters like floods but really are often not. This leaves you out of luck when or if you get hit by such a disaster. Insurance companies help you protect your things, but they do not help you if you do not have the right kind of coverage. Protect yourself and your loved ones by checking over your home insurance policy carefully to see exactly what you are protected against.