Real Estate Glossary

Flood insurance is a type of insurance that provides financial protection for property owners and renters in the event of flooding. Flooding can be caused by a variety of factors, including heavy rains, melting snow, flash floods, and coastal storms. Floods can cause significant damage to buildings and personal property, and they can also disrupt people's lives and businesses.

When purchasing a flood insurance policy, it is important to understand that standard homeowner's insurance policies do not typically cover flood damage. In the United States, flood insurance is typically sold as a separate policy, and is often required by mortgage lenders for properties located in flood-prone areas. The federal government also provides flood insurance through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA).

Flood insurance policies typically cover the cost of repairing or rebuilding a home or business, as well as the cost of replacing personal property that is damaged or destroyed in a flood. Some policies may also provide additional coverage for things like living expenses if a home or business becomes uninhabitable due to flooding.

It's important to note that Flood insurance has a waiting period of 30 days after buying insurance before it takes effect. And for NFIP policies, there is a coverage limit of $250,000 for the building and $100,000 for personal property. Higher limits can be purchased in some cases but these will be in a private market.

If you're interested in purchasing flood insurance, it's a good idea to speak with an insurance agent who can help you understand your options and determine if you need this type of coverage. It's also a good idea to review your policy regularly to make sure that you have the right amount of coverage and that your coverage is up-to-date.