Flood Insurance

AAA

DEFINITION of 'Flood Insurance'

A financial instrument that protects real property owners from water damage to the structure and/or contents of their property. While flood insurance can be purchased through many different insurance companies, all policies are federally regulated so that the same policy costs the same amount no matter which company it is purchased through.

INVESTOPEDIA EXPLAINS 'Flood Insurance'

Because typical hazard insurance policies do not cover flooding, homeowners must purchase a separate policy if they want to be protected against flood damage. For properties in high-risk areas, lenders sometimes require mortgaged homeowners to carry flood insurance to protect the structure. It is up to the homeowner whether to purchase additional coverage for the property's contents, such as furniture and clothing.



RELATED TERMS
  1. Title Binder

    A temporary form of real estate insurance coverage related to ...
  2. Water Exclusion Clause

    A restriction in a homeowner's or renter's insurance policy that ...
  3. Windstorm Hazard

    The risk that a property will sustain losses due to strong winds. ...
  4. Catastrophe Hazard

    The risk of loss from a particularly destructive event, such ...
  5. Catastrophe Insurance

    Insurance to protect businesses and residences against natural ...
  6. Impound

    An account maintained by mortgage companies to collect amounts ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Home & Auto

    The Beginner's Guide To Homeowners' Insurance

    Discover everything new homeowners need to know before they sign on the dotted line.
  2. Home & Auto

    Understanding Lender-Required Flood Insurance

    Having to buy flood insurance shouldn't be a surprise. Find out what you need to know when purchasing or refinancing a house.
  3. Insurance

    Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  4. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  5. Insurance

    Which States Have the Cheapest Home Insurance?

    You can't choose where you live by its insurance rates. But if you did, these are the states to pick.
  6. Insurance

    Does That Dental Insurance Have Cavities?

    Four key factors to check out before you just sign up for dental insurance. The coverage could be really worth it – or not.
  7. Insurance

    4 Smart Ways To Get Health Insurance In College

    These days, those attending college have plenty of ways to get affordable medical insurance, from student health plans to those sold on an exchange.
  8. Options & Futures

    Stock Safety: Top 3 Ways to Limit Your Losses

    First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
  9. Options & Futures

    Can You Buy Stock Insurace? 3 Strategies to Limit Stock Losses

    Investors can use derivative securities to effectively buy insurance on their individual holdings or on their portfolio as a whole.
  10. Insurance

    Is Burial Insurance A Ripoff?

    Term or whole life insurance is usually a better deal than burial policies. Here's why.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center