As a new homeowner, understanding your flood risk is essential. Generally speaking, water that comes from the top down is covered by homeowners insurance; water that comes from the bottom up is covered separately by flood insurance, according to the Insurance Information Institute (I.I.I.).
“Many consumers don’t understand what type of water damage is covered by standard home insurance, nor do they understand the various types of flood policies available to them,” says Jeanne M. Salvatore, chief communications officer for the I.I.I.
Water from the bottom up, such as overflow from a nearby lake, river or stream, is typically not covered by homeowners or renters insurance. Flood insurance is available from the National Flood Insurance Program (NFIP) and a few private insurance companies. Policies from the federal government have a 30-day waiting period before the coverage is activated. Excess flood insurance is also available from some private insurers if additional coverage is needed above and beyond the basic policy.
Remember: it only takes a few inches of water to cause tens of thousands of dollars in property damage. Don’t hesitate to contact your insurance professional to ask questions. Doing so will help you make informed decisions about your coverage.
You may also consider conducting a home inventory to document your belongings. Taking stock of your possessions will help you purchase the right amount of insurance, makes filing a claim easier and can be used to document losses when filing tax returns or applying for financial assistance after a disaster.