What is Flood Insurance?

Flood insurance is the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and floodways that are susceptible to flooding.

More About Flood Insurance

Across the country, only 20% of American homes at risk for floods are actually covered by flood insurance. Most private insurers do not insure against the risk of flood due to the prevalence of adverse selection, which is the purchase of insurance by persons most affected by the specific peril of flood. 

Flooding is defined by the National Flood Insurance Program as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties (at least one of which is your property). This can be from; overflow of inland waters, unusual and rapid accumulation or runoff of surface waters from any source, and mudflows.

Flooding can be brought on by landslides, hurricanes, earthquakes, or other natural disasters that influence the accumulation of water. While a homeowner may, for example, have earthquake coverage, that coverage may not cover floods as a result of earthquakes.