What Does Flood Insurance Cover? Common Misconceptions

What Is Covered

Standard NFIP flood insurance covers two categories: the building and its contents, under separate coverage options. Building coverage includes the structure, foundation, electrical and plumbing systems, HVAC equipment, appliances like refrigerators and stoves, permanently installed carpeting, and window blinds. Contents coverage includes furniture, clothing, electronics, and portable appliances.

Up to $250,000 in building coverage and $100,000 in contents coverage is available for residential properties under the NFIP. Private insurers may offer higher limits.

Common Misconceptions

Misconception: Homeowners insurance covers floods. It does not. Flood damage is specifically excluded from standard homeowners policies. You need a separate flood insurance policy.

Misconception: Flood insurance covers basement improvements. Under the NFIP, finished basements, basement improvements, and personal property stored in basements have very limited coverage. Only essential equipment like furnaces and water heaters are covered below the lowest elevated floor.

Misconception: Federal disaster aid replaces insurance. Most federal disaster assistance comes as low-interest loans that must be repaid. Grants, when available, average far less than insurance payouts. Declared disasters are also relatively rare compared to the frequency of local flooding events.

What Is Not Covered

Flood insurance typically does not cover landscaping, pools, hot tubs, fences, septic systems, financial losses from business interruption, vehicles, or additional living expenses while your home is being repaired. Some private insurers do offer coverage for additional living expenses.

Getting the Right Coverage

Review your policy carefully and understand the gaps. Consider supplementing NFIP coverage with a private excess flood policy if your home value exceeds $250,000. Use our flood risk data to understand your exposure and make informed coverage decisions.