Dear Insurance Adviser,
I've heard that homeowners insurance doesn't cover flooding. But do I need flood insurance? How would I know? My neighborhood isn't near a river, and I don't think we've ever had a flood.
-- Dry Guy
Dear Dry,
You're right. Homeowners policies don't cover flooding or any kind of water damage from water that enters the house at or below ground level. Fortunately, the federal government offers flood insurance. The question is: Do you need flood insurance if you don't live along a body of water like a lake or river? The answer is: maybe.
For sure, you need flood insurance if you live near a coastal area, as disastrous storms such as Katrina and Sandy have proven. Flooding often accompanies hurricanes, and not just along the coast but miles inland. Also, ocean-based earthquakes can cause tsunamis capable of causing flooding not just directly along the coast but also for some distance inland. (Remember the tsunami that was predicted to ravage the Oregon-Washington state coast two years ago, caused by the quake off the coast of Japan?)
But you might still consider flood insurance even if you live far from a beach or riverbank. The policies cover not only overflows of bodies of water but also torrential rain runoff, though only in certain circumstances. If heavy rain pours into your basement in Drytown, USA, flood insurance might provide some compensation, but only if:
- One other home nearby also is flooded, or you own two or more acres.
- Your basement or lowest level is a walkout or has a ground-level access door, so the water can flow out, not just in.
Also note that the policies wouldn't cover belongings in the basement other than large appliances, such as your washer and dryer.
Talk to your homeowners insurance agent, who can help you evaluate your need for flood insurance and how much, if any, coverage to buy. You can plug your home address into the National Flood Insurance Program's website to get a quote on coverage as well as information on whether your flood risk is low, medium or high. Be sure to buy the insurance well in advance of any flooding, because there's a 30-day waiting period for new policies.
Find your flood risk
Plug in your address at the National Flood Insurance Program's FloodSmart.gov to determine your flood risk:
| Risk: | What it means: |
| High risk | Homes in these zones have at least a 1 in 4 chance of flooding during a 30-year mortgage. Flood insurance will be required if you have a federally backed mortgage, such as through the Federal Housing Administration, or FHA. |
| Moderate-to-low risk | Homes in these zones are at a reduced risk of flooding. The areas receive one-third of disaster assistance for flooding and submit around 20 percent of flood insurance claims. Flood insurance isn't required but is recommended. |
| Undetermined risk | Homes in these zones have some flood risk, though no analysis has been done to determine the severity of the local flood hazard. |
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