Flood vs. Homeowner’s Insurance: Know the Difference Before Disaster Strikes

When I lived in Florida, I opted for an upgraded hurricane insurance rider on my policy. But after our home sustained a direct hit from Hurricane Irma, I discovered that my coverage did not actually include flooding, just damage from wind.

Such confusion about home insurance vs. flood insurance is alarmingly common, says Sebastian Hov, CEO of 18 Insurance. FEMA estimates only 4% of US homeowners have flood insurance, even though 99 percent of US counties have been impacted by flooding since 1996. That stat is even more saddening for those areas outside of Florida that were hit by Hurricane Helen, where only 1 percent of homeowners who sustained flooding had flood insurance.

“This lack of coverage is usually due to a false sense of security among homeowners who aren’t in designated high-risk zones,” says Hov.

If you’re unsure about the difference between home insurance vs. flood insurance, and whether you need the extra coverage, here’s what to know and how to decide.

What’s the Difference Between Flood Insurance and Homeowner’s Insurance?

The main difference between home insurance vs. flood insurance is that while homeowners’ policies typically cover a broad range of events from fires to theft, they specifically do not cover flood damage. Instead, flood insurance must be purchased separately, as a standalone policy or as an endorsement to your existing policy.

Flood Insurance Coverage

Most flood insurance coverage includes damage from flooding caused by:

• Heavy rain
• Melting snow
• Overflow of inland or tidal waters
• Mudslides or mudflows caused by flooding
• Collapse of land along the lakeshore
• Any other unusual accumulation of runoff or surface waters

The types of damage to your home that flood insurance typically covers include:

• Structural damage to the building and its foundation
• Electrical and plumbing systems
• Refrigerators and built-in appliances
• Personal property (if contents coverage is included)

Homeowner Insurance Coverage

Most homeowners’ insurance coverage includes:

• Burst pipes, leaky roofs and appliance overflows
• Fire damage
• Theft
• Wind damage
• Ice damming damage
• Water backup/sump pump failure (usually optional)

However, “There are many levels of coverage for homeowner insurance depending on what you purchase and or qualify for due to the condition of your home,” says Colleen Parsons, an independent insurance broker with World Insurance. So, make sure to check with your agent about coverage specifics.

Do I Need Flood Insurance?

You definitely need flood insurance if your mortgage company requires it. If you don’t have a mortgage but live in an area considered high-risk for flooding, it’s also a wise choice to get it.

“However, it’s becoming increasingly important for all homeowners due to climate change and increasing development in flood zones,” says Hov.

So even if you don’t live in a flood zone, you might consider getting flood insurance, especially as floods that were once considered 100- or thousand-year events are now getting more common.

To check if you’re in a high-risk zone, check with your local town or city hall, which will have access to a flood map, ask your insurance agent or see FEMA’s Flood Map Service Center. Zones starting with A and V are considered high-risk. Zones starting with B, C and X are low to moderate risk.

“Everyone is technically in a flood zone. However, the flood map will determine if you are at a higher risk for it,” says Parsons. “For example, Zones A or AE are at the highest risk of a flood, meaning those areas have a 1% annual chance of flooding and 26 percent chance over a 30-year mortgage.”

How Much Does Flood Insurance Cost?

It varies widely, from around $500 to more than $5,000 a year, depending on where you live, your flood risk, how much insurance you need and whether you get it through a private operator vs. the National Flood Insurance Program NFIP).

Based on the 2024 National Flood Insurance Program rates, the average cost in the US is $819 per year. However, says Hov, recent changes to the NFIP’s pricing model may lead to significant rate increases for some policyholders.

If you live in a high-risk area, you may be able to obtain an elevation certificate to help lower the cost, says Parsons. This is a somewhat lengthy process that will likely require a land or engineer survey. She suggests first checking with your insurance company to confirm whether this is a viable option.

For renters, flood insurance can be much cheaper, with rates as low as $99 a year for contents-only coverage, says Hov.

About the Experts

• Sebastian Hov is the CEO of 18 Insurance, an independent agency based in California.
• Colleen Parsons is an independent insurance broker with World Insurance and has been in the insurance industry for 20 years.