Flood insurance: What does it cover & when is it required?

Flood insurance covers the cost of repairs and other expenses if your home is damaged in a flood. While coverage isn't mandatory, some mortgage lenders require flood insurance if your home is in a high-risk flood zone.

Pat Howard 1600


Pat Howard

Pat Howard

Senior Editor & Licensed Home Insurance Expert

Pat Howard is a senior editor and licensed home insurance agent at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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Flood insurance covers your home and personal belongings against water damage caused by flooding, including high tides, hurricane storm surge, heavy rain, and other sources of natural flooding. A typical homeowners insurance policy does not cover flood damage, so if you live in a flood zone or close to a body of water, you should consider filling in this important coverage gap with flood insurance.

Key Takeaways

  • Flood insurance can help cover the cost of cleanup, replacement, and repairs if your home is damaged in a flood.

  • If you live in a high-risk flood zone, your mortgage lender may require you to purchase flood insurance.

  • Most insurance providers offer flood insurance through the federal government’s National Flood Insurance Program (NFIP), though some companies sell their own private flood insurance.

  • The average cost of NFIP flood insurance is $738 per year, but your own rates will depend on your home’s location, size, build, and your deductible amount.

What is flood insurance?

If you own your home, you’ll need flood insurance to cover the cost of water damage caused by flooding. Homeowners insurance covers certain types of water damage, like if your water pipes burst and flood your basement, but it won’t cover water damage caused by high inland or coastal tides, flash floods, mudflow, or other causes of natural flooding.

To keep your flood insurance active, you need to pay annual premiums to your insurance company. If your home or any contents inside are damaged in a flood, you’ll need to file a flood insurance claim to get reimbursed. 

If your claim is accepted, you’ll receive your flood insurance payout only after you’ve paid your policy deductible, which is the amount you’re responsible for paying before insurance covers the remainder of the damage. 

If your flood insurance deductible is $2,000 and your home incurs $20,000 in flood damage, your insurance company will pay you the difference between your deductible and the total flood damage; in this case, $18,000.

Genius tip

Your flood insurance premiums are directly affected by your policy deductible amount. If you raise your flood insurance deductible, your rates will go down. If you lower your deductible, your rates will go up. The National Flood Insurance Program offers deductible options ranging from $1,000 to $10,000.

What does flood insurance cover?

Over 90% of flood insurance policies are written and financially backed by the National Flood Insurance Program, a government program run by the Federal Emergency Management Agency. [1]

While these policies are managed by FEMA, they’re purchased through private insurance companies, so you can often purchase NFIP flood insurance from your private home insurance company.

FEMA flood insurance includes two types of coverage with their own separate deductibles: building property coverage and personal property coverage.

Coverage typeWhat it doesCoverage limit
Building propertyPays to repair or rebuild your home or garage$250,000
Personal propertyPays to repair or replace damaged furniture, electronics, appliances, and other stuff you own$100,000

Building property coverage

Flood insurance covers flood damage to the structure of your home and any detached garages on your property through your policy’s building property coverage. In the event your house is flooded and your floors and walls are severely damaged, this coverage can pay to tear out and repair the damaged portion of your home. 

The following parts of your home are covered under building property coverage.

  • Your home’s structure and foundation

  • Built-in appliances

  • Furnaces and water heaters

  • Central air conditioners

  • Cabinets

  • Plumbing and electrical systems

  • Debris removal and cleanup  

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Personal property coverage

Flood insurance also covers your personal property inside the home if it’s damaged by a flood. If your belongings or valuables incur water damage, flood insurance can cover the cost of replacement or repairs.

With personal property coverage, the following items in your home are protected against flood damage:

  • Clothing

  • Furniture

  • Electronics

  • Window air conditioning units

  • Portable appliances

  • Washer and dryers

  • Freezers

  • Artwork, furs, jewelry, and watches

Expensive valuables like artwork, collectibles, jewelry, and watches have a special limit of liability of $2,500 in a standard NFIP policy. This means your insurance company will reimburse you a maximum of $2,500 if they’re lost or damaged in a flood. Considering a single piece of jewelry can easily cost more than that, try to keep valuables in an elevated area of your home if possible. 

You also have the option of purchasing coverage through a private insurance company that sells its own flood insurance independent of the NFIP. Private flood insurance often provides more comprehensive coverage with higher available policy limits for your home and belongings. If you have an expensive watch that you need covered at its appraised value, it's worth considering private flood insurance over the NFIP. 

Genius tip

With FEMA flood insurance, your personal property is only covered at its actual cash value. This means the amount you’re paid on a claim is based on the value of the property at the time it was damaged. So if you have a 10-year-old sofa that was severely damaged during a flash flood, you’ll be reimbursed for a decade-old sofa rather than a new one.

➞ Find out how much flood insurance you need

What does flood insurance not cover?

Flood insurance doesn’t cover flood damage that originates in your home. So if your pipes leak or your sewer line backs up and floods your basement, you won’t be covered for cleanup or repairs. 

Flood insurance also won’t pay for damages to the following:

  • Precious metals

  • Cash

  • Trees and plants

  • Fences

  • Pools and hot tubs

  • Patios and decks

Is my basement covered by flood insurance?

There are also coverage limitations for the basement of your home. For example, if you have a finished basement and the walls and floors are damaged, your insurer won’t reimburse you for the repairs. Flood insurance also won’t cover any personal belongings stored in your basement.

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Do I need flood insurance?

Although flood insurance is not required by law, most mortgage lenders will require it if you have a federally backed mortgage and your house is in a FEMA-designated floodplain. You can check your home’s flood zone using FEMA’s flood map tool

If the following apply to your house or mortgage, you’ll likely need to purchase flood insurance.

  • Your home is located in a Special Flood Hazard Area — an area with the highest risk of flooding, according to FEMA. If your house is in a zone that starts with an A or V, then you’re in an SFHA. 

  • You have a federally insured mortgage through the FHA or VA, or a mortgage backed by Fannie Mae or Freddie Mac.

  • You live in an NFIP-participating community. Around 22,000 communities across the U.S. participate in the National Flood Insurance Program — you can check to see if you’re in an NFIP community by using FEMA’s tool.

When you go to purchase flood insurance, you'll likely need to get a flood elevation certificate if you live in one of the above-mentioned high-risk flood zones. This helps insurance agencies determine your home's risk of flooding — and in turn how much to charge you for premiums.

If you don’t have a mortgage or your lender doesn’t require it, you should consider flood insurance anyway. This is because flooding isn't covered by standard home insurance policies. And it's the most common and costly natural disaster in the U.S. — just a single inch of water in your house can cause up to $25,000 in damage, according to FEMA. [2]  You can check out even more flood insurance statistics with our guide.

How much does flood insurance cost?

The average cost of flood insurance through the National Flood Insurance Program is around $738 per year, according to an analysis of FEMA policy data. Your flood insurance premiums are based on multiple factors, including:

  • Your home’s flood risk: Flood insurance rates are mostly based on your home’s flood risk, so its location, size, and build will all factor into your policy premium. 

  • Your coverage types and amounts: Your flood insurance rates are directly impacted by the amount of building property and personal property coverage in your policy. 

  • Your policy deductible: Your rates are also directly impacted by your policy deductible amount. The higher your deductible, the lower your rates will be.

Keep in mind that as of October 2021, FEMA changed how it prices flood insurance. The changes will increase flood insurance costs on roughly 77% of existing policies. The rate changes kick in for existing policies once they renew on or after April 1, 2022, so the cost of most active flood policies is still based on the old rating method.

➞ Check out our step-by-step guide to buying flood insurance

Frequently asked questions

What is the waiting period after buying a flood insurance policy?

After buying a flood insurance policy through the NFIP, you'll need to wait 30 days from the purchase date until your policy is active. However, if you buy coverage from a private insurance company, the waiting period is shorter — typically between 10 and 14 days.

What can I do if my home was damaged by flooding but I don't have flood insurance?

The U.S. government provides grants through the Federal Emergency Management Agency (FEMA) and loans through the Small Business Administration (SBA) to help homeowners without flood insurance get back on their feet after a natural disaster. You can learn more about your options with our guide to assistance available to homeowners without flood insurance.

Can I get flood insurance for my mobile home?

Yes, many insurance companies offer flood insurance specifically for mobile homes. Just like with standard homeowners insurance, you'll need a separate flood insurance policy on top of your mobile home insurance policy to ensure you're fully protected after a natural disaster. You can learn more with our guide to flood insurance for mobile homes.