What is Flood Insurance?
Flood insurance provides protection for property damage caused by floods, with risk assessment based on topographical maps identifying flood-prone areas. Insurers utilize these maps to determine the vulnerability of specific properties to flooding.
More About Flood Insurance
According to the National Flood Insurance Program, flooding is characterized as the temporary or permanent submergence of two or more acres of typically dry land or two or more properties, including at least one owned property, caused by the overflow of inland waters, rapid accumulation of surface waters, or mudflows.
Flooding can occur due to various natural disasters such as landslides, hurricanes, earthquakes, and more. It’s important for homeowners to have separate flood insurance coverage regardless of the cause, as other policies like earthquake coverage do not protect against flood-related damages.
Only a small fraction of homes in the US, around 20%, have flood insurance despite being at risk. Many private insurers do not offer coverage for floods due to adverse selection, where those most susceptible to flood damage are more likely to seek insurance.