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. How are contingent beneficiaries informed of a payout?

    One of the greatest tools in estate planning is beneficiary designation. Listing primary and contingent beneficiaries is ... Read Full Answer >>
  2. What is the usual profit margin for a company in the insurance sector?

    The best estimates of the average insurance company net profit margin are between 3 and 8%, with a likely median average ... Read Full Answer >>
  3. What are the benefits of high net worth insurance?

    High-net-worth individuals (HWNI) face unique insurance challenges and tend to gravitate towards different insurance products. ... Read Full Answer >>
  4. How does the risk of investing in the insurance sector compare to the broader market?

    Due to economic, demographic and interest rate trends, there is less risk when investing in the insurance sector compared ... Read Full Answer >>
  5. What are the most popular mutual funds that invest primarily in the insurance sector?

    Under the purview of the financial services industry, the insurance sector is an attractive investment option for mutual ... Read Full Answer >>
  6. What are some examples of how corporations manage short-term investments?

    One of the easiest ways for a business owner to reduce liability is to incorporate as a legal entity to enjoy the protection ... Read Full Answer >>
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

    India's Two-Child Policy

    As of 2014, 11 Indian states have passed laws to restrict Indian citizens from having no more than two children.
  5. Home & Auto

    10 Must-Know Questions To Ask A Home Seller

    To get a sense of what the home you're considering buying is really like, it helps to talk to the seller.
  6. Insurance

    Is Personal Legal Insurance A Good Deal?

    Some employers offer personal legal insurance as an opt-in benefit. Would it make sense for you?
  7. Insurance

    Is It Safe To Be Without Umbrella Insurance Today?

    At low cost, you can buy significant extra liability coverage in case you're sued due to an accident or other trouble. See it as bankruptcy protection.
  8. Insurance

    Homeowners Insurance Losers: States That Pay Most

    Which states charge you the most for homeowner's insurance? Hint: They're regularly featured on the Weather Channel.
  9. Insurance

    What Pet Insurance Actually Covers

    If you buy insurance for your pet, what will it cover – and what will you still have to pay for?
  10. Insurance

    Is Pet Insurance Worth The Price?

    Should you insure your pet? Here's how pet insurance works and how to decide if it's worth buying this coverage.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center