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What's Not Covered by Flood Insurance?

This spring's downpours may have you wondering if it's finally time to buy a flood insurance policy. Often the purchase isn't a matter of choice -- a mortgage lender will require that you buy a policy if your home is within a designated flood area. But if you live in an area that is a lower risk for flooding, according to government maps, or if you don't have a mortgage, the decision to spend hundreds of dollars on a special flood policy is yours alone.

You can buy coverage under the National Flood Insurance Program from your regular insurance agent.

Here are several things to know about what the insurance will pay for:

  • There's a 30-day waiting period for coverage to go into effect, unless your policy is required by a lender before you close on a mortgage.
  • That knee-deep water in your basement might not qualify as a flood. To be covered, the flooding has to affect at least two acres, or at least two properties.
  • Building coverage (up to $250,000) and personal property coverage for its contents (up to $100,000) are two different policies.
  • Trees, fences, decks, hot tubs, swimming pools, septic systems and other outdoor items are not covered.
  • Damage to the part of your home most likely to be flooded--the basement--is eligible for only limited coverage. Much depends on whether you live in a designated flood zone, and whether your home was built before your community adopted floodplain ordinances that are required for participation in the federal flood insurance program. Generally, basements are covered for damage to utilities, including furnaces, hot water heaters, clothes washers and dryers, food freezers (and the food in them), circuit breaker boxes and other parts of the household electrical system. But the stuff that makes up a finished basement, paneling, linoleum, rugs and furniture, are not covered. Ask an insurance agent for details on what would be excluded at your home before you sign up for a policy.

    Have you had experience submitting claims to the federal flood insurance program? Do you think the coverage is worth the expense?

By Elizabeth Razzi  |  May 27, 2009; 6:00 AM ET
Categories:  Home features  
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