What flood insurance does and does not cover

By SALLY HO SEATTLE AP Though natural disasters cycle across seasons and regions in the U S it s often a shocking discovery for property owners how expansive and expensive flood and water damage can be when a major storm devastates their homes businesses and communities That s because oftentimes insurance doesn t cover what the policyholder thinks it does or thinks it should The disappointing surprise is that while the standard home insurance program does cover fire and wind damage even good property insurance typically doesn t cover things like flooding and earthquakes which usually require a special and separate initiative for each Here are the things to know about flood insurance FILE Water overflows from the Canyon Lake spillway near New Braunfels Texas Friday July adding to the flood waters along the Guadalupe River AP Photo Eric Gay File Who has flood insurance Preponderance people who have flood insurance are required to have it Although numerous property owners have the option of purchasing flood insurance it is mandated for government-backed mortgages that sit in areas that the Federal Crisis Management Agency deems highest jeopardy A great number of banks require it in high-risk zones too But majority of private insurance companies don t carry flood insurance leaving the National Flood Insurance Operation run by FEMA as the primary provider Congress created the federal flood insurance plan more than years ago when multiple private insurers stopped offering policies in high-risk areas FEMA s Flood Map Institution Center has an online tool to check your area FEMA notes even a chance of flooding is considered high vulnerability because it amounts to a -in- chance of flooding over the life of a -year mortgage An American flag sits on a destroyed bridge over the Guadalupe River at Arcadia Loop and Bear Creek Road after flooding in Kerrville Texas on Wednesday July AP Photo Gerald Herbert Who doesn t have flood insurance Homeowners in high-risk areas who should have it sometimes decide not to get it Someone who pays off their mortgage can drop their flood insurance once it s not required Or if they purchase a house or mobile home with cash they may not opt for it at all The rest of us are just rolling the dice even though experts have long warned that flooding can happen just about anywhere because flood damage isn t just water surging and seeping into the land it s also water from banks as well as mudflow and torrential rains Mark Friedlander spokesman for the Insurance Information Institute an industry group disclosed only about of U S households have a flood procedures primarily in the coastal areas prone to hurricanes That rate has remained steady in latest years despite the increasing frequency of severe flooding events including in areas that are not formally considered by the administration to be high jeopardy Lack of flood coverage is the largest insurance gap across the country Friedlander disclosed in an email Ninety percent of U S natural disasters involve flooding and flooding can occur just about anywhere it rains What flood insurance covers Even if a homeowner does have flood insurance the coverage may not be enough to make a policyholder whole again FEMA s National Flood Insurance Effort only covers up to for single-family homes and for contents Renters can get up to for contents and commercial flood insurance will cover up to There are concerns that such flooding coverage limits are not robust enough especially at a time when state change is making strong hurricanes even stronger and making storms in general wetter slower and more prone to intensifying rapidly Related Articles What I learned from my first meeting with a financial advisor What to know and what isn t known yet about US tax deductions for tips and overtime pay Could renting be part of the new American dream Finance writers share regrets from Prime Days past Bitcoin mining A beginner s guide to how it works And what typically happens to the people without flood insurance in a major storm is that they can try to recover specific money from their standard home insurance but may end up in a fight to determine what damage is or isn t wind versus rain or even wind-driven rain Don Hornstein an insurance law expert at the University of North Carolina disclosed the line between wind and water is a thin but very clear line that technical experts can determine Should there be a proverbial tie the law favors the insurance company If the house was simultaneously destroyed by flood and concurrently by wind it s not covered by private insurance Hornstein announced