Flood Insurance if You're not Near Water?

By Jack HungelmannBankrate.com

Dear Insurance Adviser,

I've heard that homeowners insurance doesn't cover flooding. But do I need flood insurance? How would I know? My neighborhood isn't near a river, and I don't think we've ever had a flood. 

Continue Reading Below

- Dry Guy

Dear Dry, 

You're right. Homeowners policies don't cover flooding or any kind of water damage from water that enters the house at or below ground level. Fortunately, the federal government offers flood insurance. The question is: Do you need flood insurance if you don't live along a body of water like a lake or river? The answer is: maybe.

For sure, you need flood insurance if you live near a coastal area, as disastrous storms such as Katrina and Sandy have proven. Flooding often accompanies hurricanes, and not just along the coast but miles inland. Also, ocean-based earthquakes can cause tsunamis capable of causing flooding not just directly along the coast but also for some distance inland. (Remember the tsunami that was predicted to ravage the Oregon-Washington state coast two years ago, caused by the quake off the coast of Japan?)

But you might still consider flood insurance even if you live far from a beach or riverbank. The policies cover not only overflows of bodies of water but also torrential rain runoff, though only in certain circumstances. If heavy rain pours into your basement in Drytown, USA, flood insurance might provide some compensation, but only if:

  • One other home nearby also is flooded, or you own two or more acres.
  • Your basement or lowest level is a walkout or has a ground-level access door, so the water can flow out, not just in.

Also note that the policies wouldn't cover belongings in the basement other than large appliances, such as your washer and dryer.

Talk to your homeowners insurance agent, who can help you evaluate your need for flood insurance and how much, if any, coverage to buy. You can plug your home address into the National Flood Insurance Program's website to get a quote on coverage as well as information on whether your flood risk is low, medium or high. Be sure to buy the insurance well in advance of any flooding, because there's a 30-day waiting period for new policies.

Find your flood risk

Plug in your address at the National Flood Insurance Program's FloodSmart.gov to determine your flood risk:

Source: FloodSmart.gov.

Ask the adviser

To ask a question of the Insurance Adviser, go to the"Ask the Experts" page and select "Insurance" from the drop-down box. Read more Insurance Adviser columns.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

Copyright 2012, Bankrate Inc.