Flood Insurance


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.

BREAKING DOWN '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.

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  1. Does renters insurance cover flooding?

    An all-perils renters insurance policy does not cover damage from a flood. Consumers sometimes confuse a pipe bursting with ... Read Full Answer >>
  2. Does homeowners insurance cover broken pipes?

    An all-perils homeowners insurance policy does not usually provide coverage for an actual broken pipe. However, the water ... Read Full Answer >>
  3. Does homeowners insurance cover mold?

    Homeowners insurance covers mold if you purchase the coverage rider. In some states, the coverage is included automatically, ... Read Full Answer >>
  4. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  5. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
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    Renters insurance provides two main forms of coverage – liability and contents insurance – and they are offered together ... Read Full Answer >>

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