Prepare for Storm Season With Flood Coverage

Your homeowners policy won't pay for damage caused by rising water. Here's how to get the coverage you need.

The Northeast was hit hard by storms and flooding recently, and I hear that more storms are on their way throughout the country. What type of storm damage is covered by homeowners insurance and what is covered only by flood insurance? How much does a flood policy cost?

Homeowners-insurance policies typically cover damage that comes from the top down -- such as rain and wind damage -- but they don’t cover rising water and flooding.

You may be able to boost your coverage a bit by adding a sewage-backup rider to your home-insurance policy. This extra rider generally costs about $50 per year to cover $10,000 to $20,000 of damage if your sewer backs up or if water gets into your home because your sump pump stops working. It’s a good idea for everyone to add this coverage.

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To get flood coverage, you must go through the National Flood Insurance Program. Your mortgage company may require you to get flood insurance if you live in a high-risk area, but the coverage can be important even if your lender doesn’t require it.

Most people can buy federal flood insurance through their homeowners-insurance agent. If you don’t have one, you can find a local agent at the NFIP’s (opens in new tab) Web site. If you want to have coverage in place for the spring storms, you need to act quickly -- there’s a 30-day waiting period before the flood coverage takes effect.

Flood insurance can be inexpensive for low-risk areas. If you don’t have a basement, the annual premium for a preferred-risk policy can cost as little as $348 a year for the maximum coverage of $250,000 for your dwelling and $100,000 for your possessions, or $388 per year if you have a basement. Similar coverage can cost $1,484 per year in a moderate-risk area, or more than $2,600 in a high-risk area. (opens in new tab) has a great tool that lets you type in your address and immediately see your property’s flood risk, your estimated premium and contact information for agents serving your area. It also has an interactive tool to show how much damage you could have for each inch of flooding, and a cool new flood history map (opens in new tab) that lets you look up how many flooding events and how much flood damage there was in your state and county in the past year, along with a link to detailed information about the floods.

The federal flood program provides enough coverage for most people. But the maximum dwelling coverage of $250,000 could leave people who have expensive homes short of what they need in the event of a total loss. Several insurers, such as Chubb and Fireman’s Fund, offer excess flood coverage to supplement the federal policy and increase the coverage limits to the same level as your homeowners insurance. These policies also provide some extra coverage beyond the federal plan, such as replacement value for contents (the federal plan covers only depreciated value) and the cost of additional living expenses should you have to move out of your home for a while because of the flood damage.

For more information about flood coverage and lessons from people whose homes were damaged in the Midwest floods of 2008, see Lessons From the Floods. Also see Insurance Lessons After Katrina (opens in new tab) and Make Your Insurer Pay (opens in new tab) for more information about what is and isn’t covered by homeowners insurance after a storm, as well as strategies that helped homeowners get their claims paid after Hurricane Katrina.

For advice on preparing your finances for a disaster, see Protect Your Home and Finances Against Twisters (opens in new tab) and Protect Your Home Before Disaster Strikes (opens in new tab).

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.