084: Flood Insurance- what is it?

084: Flood Insurance- what is it?

The most typical question I get from my clients about Flood insurance is this: If my home gets damaged in a flood, am I going to be covered?

The answer is: It depends on the value of your home, level of water damage and if you actually have coverage. General homeowner’s policies don’t not provide flood coverage as part of the policy.

Let’s start by looking at what Flood Insurance is all about:

  1. General homeowner’s policy doesn’t include flood coverage
  2. Most common policies are offered thru 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. If you need more coverage, you can buy excess coverage.

  1. If you live a flood zone and have a mortgage on the property, you might be required to buy this coverage by your lender.

In the next episode we will discuss what Flood insurance actually covers, because flood damage can be caused by variety of perils and not all of them are covered.

 
Anna Sergunina
anna@adviceonly.net

I passionately believe that in order to live a life of fulfillment and joy, we must genuinely serve each other in any way possible. I found my mission in life to serve others via financial planning. Anna regularly writes about personal finance. Her work appears on Business Insider, Nasdaq, Nerdwallet, among others. Anna is the creator of Money Flow system.

Get Started with Anna