Do I Need Flood Insurance?

Insurance is a great thing to have when the unexpected occurs. Unfortunately, it’s very rare to find a policy that covers every possible thing that might happen to your home; some incidents such as natural disasters typically require separate policies that cover the specific damages that can occur when these sorts of things happen. A good example of this is flood insurance, which isn’t included in most homeowners’ policies, but is still a popular coverage option.

When looking at insurance options, you may find yourself asking whether or not you need flood insurance. It’s one of those policies where if you really do need it then it’s practically a must-have, but if you’re unlikely to ever actually use it then it is somewhat of an unnecessary expense. To help you answer the question of whether you actually need flood insurance, let’s look at the coverage it provides and the circumstances in which it’s all but essential.

What Is Flood Insurance?

As the name implies, flood insurance is an insurance policy that provides coverage in the event of a flood. That is a bit of an oversimplification of the coverage that the insurance provides, though, and it can lead some people to not get flood coverage when they actually live in an area that needs it. Flood insurance provides coverage in the event of a flood, yes, but more specifically it provides coverage to help you recover in the event of flood damage.

This may seem like it means pretty much the same thing, but the difference can be significant. While flooding obviously produces flood damage, there are multiple ways that flooding can occur that need to be covered. Prolonged periods of heavy rainfall can produce floods, but flooding can also occur with severe storms, tornadoes, or hurricanes. Flood insurance may also cover some damage caused by events that are related to flooding, even if the flood waters don’t directly cause it, such as flooding resulting in a sewer backing up and similar incidents.

Do You Need Flood Coverage?

In areas that are prone to flooding, you’ll likely be required to buy flood insurance as a condition of your mortgage before you can take out a loan to buy a home. This is especially true if you buy your home with an FHA loan or other government-backed mortgage and live in what’s known as a “flood hazard area.” These are parts of the country where there is a significant risk of high flood waters on a regular or semi-regular basis. Even if your mortgage doesn’t specifically require flood insurance, if you live in such an area, you really need to pick up a policy because it’s more than likely that you’ll eventually experience some amount of flooding.

Even if you don’t live in a flood hazard area, though, some parts of the country are more prone to flooding than others. If you’re likely to experience large spring or summer storms, live near a coast where hurricanes or tropical storms might hit, or even just buy a home in an area that’s known to occasionally get heavy rains that are slow to drain due to clay or other deposits in the soil, then you might still have a not-insignificant flood risk. Provided that the coverage is affordable, having flood insurance in any of these areas might make recovery a lot easier if you end up finding yourself on the wrong end of a major weather event that results in significant flooding around your home.