Got Flood Insurance? You Probably Need It

Just 1 inch of flood water throughout a 2,000-square-foot home can cause almost $21,000 in damage, according to the National Flood Insurance Program.

It can seep into furniture, flooring, walls, lighting, electronics, appliances and irreplaceable keepsakes and photos.

Multiply one home's damage by entire communities, and it's easy to see why floods are so devastating -- and why flood insurance is so important.

Flooding is the most common and costly natural disaster in the U.S., according to the Federal Emergency Management Agency, or FEMA. FEMA administers the National Flood Insurance Program, or NFIP, the primary source of coverage for homeowners and renters. Congress recently agreed to a five-year extension of the program, which insures 5.6 million property owners.

With flooding, unlike other natural hazards, the very first way to protect yourself is to buy insurance, says Leslie Chapman-Henderson, president of the Federal Alliance for Safe Homes, or FLASH.

The insurance is so affordable compared to the cost of flood damage that it makes no sense not to have it, she says.

You especially need it because homeowners or renters insurances don't cover flooding. And that's the most misunderstood aspect of flood coverage, says Loretta Worters, vice president of the Insurance Information Institute, an industry trade group.

Here are answers to four key questions about flood insurance. For specifics about your community and home, talk to the agent who handles your homeowners or renters policy.

Is it Required?

Unless you own your home free and clear of loans or live in an apartment or condo on an upstairs floor, expect that you'll have to buy flood coverage.

Lenders will require it if you live in an area considered at high risk for flooding and your mortgage is federally backed, such as by the Federal Housing Administration.

In fact, just expect any lender to want it, says Worters.

FEMA says flooding affects all states, and everyone is at risk because even very small streams and creeks can flood. Your insurance agent and lender will know whether your home is in a high-risk zone.

Where Do You Get It?

FEMA allows private insurers to write and administer policies for the National Flood Insurance Program. Your homeowners or renters insurance agent should be able to write flood coverage for you.

Coverage is available in about 20,000 participating communities. Discounts of up to 45% are available in communities where local officials enforce certain requirements that can reduce flood damage.

If your community doesn't take part in the national program, you'll likely be able to get flood insurance from private carriers, says Chris Hackett, personal lines policy director at the Property Casualty Insurers Association of America.

How Much Will it Cost?

Your flood policy premium will be determined by your home's design, age, location, contents and the amount of coverage you decide to buy.

Generally, a homeowner will pay an average of $400 a year for $100,000 worth of flood insurance, says Hackett.

"That's pretty reasonable," he adds.

Your agent will be able to give you an exact cost. For a general idea, you can plug your street address into the flood risk profile on the National Flood Insurance Program's website.

So the site shows, for example, that a 1,400-square-foot two-story condo-townhome in Plantation, Fla., is at high risk for flooding and sits in a special flood hazard area.

Annual flood insurance for the building and contents for that condo-townhome could cost as little as $472 or as much as $2,930, according to the website's calculator.