Many homeowners are surprised—or even shocked—to learn that flood damage is not covered by standard homeowners insurance. In fact, most homeowner policies explicitly exclude flood-related losses, leaving property owners vulnerable if water causes damage to their home or belongings.
For protection against flooding, homeowners need a dedicated flood insurance policy. While many purchase coverage through The National Flood Insurance Program (NFIP), it’s important to understand the coverage limits, exclusions, and other options, including private flood insurance, to ensure you’re fully protected.
What is Considered a Flood?
Flood insurance covers direct physical loss caused by a flood. A flood is generally defined as an excess of water on land that is usually dry, including situations like:
- Overflow of inland or tidal waters
- Rapid accumulation or runoff of surface waters
- Mudflows (a river of liquid mud on normally dry land)
- Collapse or subsidence of land caused by erosion or water
Even a relatively small amount of water in your home can cause expensive damage, including destroyed flooring, drywall, and personal property. Flood insurance is critical whether your home is near a body of water or in a seemingly low-risk area, as flooding can occur anywhere.
The National Flood Insurance Program (NFIP)
The NFIP was established by Congress in 1968 to provide flood insurance where private coverage was limited. The program allows homeowners in participating communities to purchase government-backed insurance to protect against flood-related losses.
While the NFIP provides vital protection, it does not cover all potential damages, and coverage limits may not reflect the true value of your home or belongings.
NFIP coverage limits include:
- One- to four-family residential buildings: up to $250,000 for the structure and $100,000 for contents
- Other residential buildings (5+ units): $500,000 for the building and $100,000 for contents
- Non-residential commercial buildings: $500,000 for the building and $500,000 for contents
If your property has a mortgage from a federally regulated lender and is in a high-risk flood zone, flood insurance is usually required. Even without a mortgage, purchasing flood insurance is strongly recommended.
