When protecting your home from damage and loss, flood insurance is crucial. While it’s not required by federal law, a mortgage provider may need it if the property is in a high-risk area.

What is Flood Insurance?

Floods are the most common natural disasters, and they can cause tremendous damage in a short amount of time. While most homeowners’ and renters insurance policies exclude flood coverage, a federal program called the National Flood Insurance Program (NFIP) offers building and contents coverage to eligible property owners. In general, you must have this coverage if you reside in a high-risk area and have a mortgage from an insured lender or subject to federal regulation. Still, it can also be purchased by property owners in moderate-to-low-risk areas.

An NFIP flood policy is divided into two sections: the building section and the contents section. The building section covers your home’s structure, while the contents section is designed to protect your possessions, including furniture, clothes, appliances, and valuable items like artwork and furs. The NFIP reimburses for the loss of your belongings at either their replacement cost value or actual cash value (ACV), depending on the type of policy you have.

To determine your flood risk, the NFIP uses topographical maps to designate specific areas as flood zones. 

Insurance flooding

What is a Flood Deductible?

A flood deductible is the amount you must pay before the insurance company begins to cover damages. Most flood policies come with separate deductibles for building and contents coverage, and you usually get to choose the amount. As with most types of insurance, a higher deductible will result in lower premiums, but it also means you’ll have to pay more out of pocket if you file a claim.

Flood damage is a severe risk, especially in areas prone to flooding. Many mortgage lenders require that homeowners with mortgages on properties in high-risk flood zones carry flood insurance, and the federal government provides grants and other financial assistance to property owners in these areas.

The right amount of Georgia flood insurance to purchase depends on the size and value of your possessions, the structure of your home and its age, the likelihood that your area will experience a flood, and other factors. You can determine the right amount of coverage and risk assessment with the assistance of an insurance agent. A home inventory is an excellent way to quantify the value of your belongings.

While not required, most homeowners should consider purchasing a flood policy. It’s important to know that most homeowners insurance doesn’t cover flooding, and you may have significant financial losses without a flood policy.

How Does Flood Insurance Work?

Homeowners, condo, and renters insurance policies don’t typically cover flood damage — so if you live in an area at risk for flooding, it’s important to get separate flood coverage. A flood policy works much the same as other property insurance, with an annual premium based on the property’s risk level and the deductible you choose.

The National Flood Insurance Program (NFIP) offers two forms of flood insurance: building and contents coverage. The NFIP provides capped limits – $250,000 for your house and $100,000 for personal possessions — on an actual cash value basis, meaning you’ll receive only what your belongings were worth before the flood damaged them.

Your insurance agent can aid you in determining the amount of structure and contents coverage you require, as well as explaining how the NFIP evaluates your property and your alternatives for lowering the cost of a flood policy. For example, you can provide an elevation certificate to your insurance agent to reduce the cost of an NFIP policy by showing that your house is below the base flood elevation.

You may be required to buy a flood insurance policy from your mortgage lender, and the Federal Emergency Management Agency (FEMA) also recommends getting it if you live in a high-risk zone. However, even if you don’t live in a high-risk area, you can still be affected by floods from various sources, including melting snow and backed-up drains.

What is a Flood Policy?

Flood insurance is a separate policy from homeowners’ or renters insurance that covers the costs of damages and losses related to flooding. It’s available to property owners who live in areas prone to flooding or at risk of floods and can be purchased from the National Flood Insurance Program (NFIP) or private insurers.

Many mortgage lenders require people who live in high-risk flood zones to get flood insurance to qualify for a federally-backed home loan. Flood insurance can also be a requirement to receive disaster assistance from FEMA following a flood event.

Even those who live far from bodies of water may be at risk of flooding. Floods can be caused by various factors, including storms, snow melt, clogged drainage systems, and sewer backups. Conventional homeowners, renters, or condo insurance policies will only cover flood damage if it’s so costly.

Floods are a common occurrence in the United States, and it’s essential to check your location’s risk by using the NFIP map portal. To view the hazard zones in your region, enter your location or ZIP code and zoom in. Zones A through V are considered a high risk of flooding, and obtaining flood insurance is highly recommended. You can also ask your local or state government, mortgage lender, insurance professional, or environmental professional for information about the risk of flooding where you live.


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