Do you Need Flood Insurance?


Take a look at your homeowner’s insurance policy, and you may be surprised to learn you’re covered for water damage, but not flooding. Flood’s water, isn’t it? Yes, but there’s a difference for insurers.


Homeowner’s insurance covers most losses due to storms, hail, pipe freezing, and the weight of snow or sleet, according to StateFarm.com, but it won’t cover water damage due to these events, advises TheSimpleDollar.com. It also won’t cover flooding due to leaking appliances, stopped up sinks, broken toilets, etc.


So why isn’t water damage from catastrophic events like flooding, earthquakes and hurricanes included? “Adverse Selection” is an industry term that simply means that the insurer can’t collect enough in premiums to cover the risk. Some insurers offer private flood insurance to high-end homeowners in limited groups, or they may offer limited coverage to policyholders that are part of the National Flood Insurance Program (NFIP), a federal program designed to help homeowners coverage for up to $250,000 for the structure of the home and up to $100,000 for personal possessions.


Most homeowners don’t need flood insurance, but to be certain, double check with your insurer what water damage is covered by your policy and if you need additional insurance.

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