Flood Insurance: The 6 Most Common Questions Answered

Flooding from Hurricane Harvey continues to devastate Houston, southeast Texas, and parts of Louisiana. Even after 11 months, central and eastern North Carolina are still recovering from the floods brought by Hurricane Matthew. And now, Hurricane Irma and her potential devastation are causing many people to wonder if their homes would be covered should disaster strike.

Here are answers to some of the most common questions we get about flood protection.

What is flood insurance?

Flood damage is specifically excluded on standard homeowners and renters insurance, therefore, a separate flood insurance policy can protect your home and its contents should one occur.

Do I need flood insurance?

Homeowners with federally-backed mortgages, who live in areas at high risk of flooding are typically required to carry a separate flood insurance policy. But, flood insurance isn't just for homes in high-risk areas. Anyone with a home in a flood-prone area should consider purchasing flood insurance.

The Federal Emergency Management Agency (FEMA) says that all 50 states have experienced floods or flash floods in the past five years and that more than 20 percent of the claims it handles come from moderate- to low-risk regions.

What does a flood insurance policy cover?

Flood insurance covers the structure of your home and much of your personal property in the event of a flood.

Structural coverage for your home typically includes things like the foundation, electrical, plumbing, HVAC, water heaters, built-in appliances, and flooring. Personal property inside your home that can be covered includes clothing, electronics, washers and dryers, area rugs, and furniture.

Be aware that flood insurance does not cover the land your home is on, which means swimming pools and landscaping are not covered.

How much does flood insurance cost?

Among other things, the cost of flood insurance depends on the location of the home, proximity to flood exposure, age and value of your home, and the amount of coverage you choose. In North Carolina, the average cost for $100,000 of coverage is $370 per year.

On the other hand, consider the cost of not being insured: FEMA says that the financial cost of 1 inch of water inside a building can be over $20,000.

How can I buy flood insurance?

It's best to buy the flood insurance through the company that provides your home insurance. Flood is priced with the National Flood Insurance Program, so the price is standardized. As a result, having it with the company that provides the coverage for your home insurance makes sense since they know more about you and about your home.

How soon before my policy is effective?

Unlike other types of insurance, flood insurance coverage doesn't kick in from the first day. There is a 30-day waiting period after purchase for the policy to take effect. The exception is if you are closing on the purchase of a home, then coverage can be made effective the date of closing if it is paid for at that time.