Learn personal and professional finance terms to keep you in the know
Flood insurance is a separate insurance policy that covers damage to your home and belongings caused by flooding, which is not covered by standard homeowners insurance. It is available through the federal government's National Flood Insurance Program (NFIP) as well as some private insurers. If your home is located in a high-risk flood zone as designated by FEMA, your mortgage lender will typically require you to carry flood insurance as a condition of the loan. Even homeowners outside of designated flood zones may benefit from flood coverage, since a significant percentage of flood damage occurs in areas considered low to moderate risk. Flood insurance policies typically have a 30-day waiting period before they take effect, so it's important not to wait until a storm is approaching to purchase coverage.
