What is the difference between homeowners insurance vs flood insurance? Many people think that flood damage is covered by their home insurance, but flood coverage is a totally separate than your homeowners insurance policy.
Homeowners Insurance vs Flood Insurance
Your home is the most important purchase of your life. Not only is it a haven for you and your family, it is also one of your biggest assets. Full and comprehensive insurance is the only way to completely protect your investment. Even if the worst-case scenario actually occurs, an insurance plan gives you the means to repair and rebuild, without putting you or your family in significant debt.
One of the most common forms of damage facing homeowners today is the threat of floods. Hurricanes, excessive rain fall, and the sudden melting of snow are all increasingly common events affecting millions of Americans. Learning the difference between homeowners insurance vs flood insurance gives you the information you need to keep your investment safe.
Many homeowners, especially first-time homeowners, mistakenly believe that homeowner's insurance is the only type they need. At first glance, most homeowner's insurance policies do seem quite comprehensive. They tend to cover very specific hazards or risks, such as a damage to your roof due to falling branches or electrical shortages after lightning storms.
While the individual details vary depending on the issuer, most cover things like accidental water damage, which gives the impression that they are also applicable in the event of floods. However, this is not true - homeowner's insurance almost never covers damage due to flooding. This is a huge difference between homeowners insurance vs flood insurance.
If you do not invest in a separate flood insurance policy, you could face steep repair costs. Coverage for water damage typically only extends to small leaks caused by heavy rains or burst water pipes.
There is a difference between damage caused by a flood and water damage, even if the end result looks the same. According to federal insurance law, water damage, which is covered by homeowner's insurance, generally refers to water that has entered the home as a result of damage, such as broken window or burst water pipe.
Conversely, a flood happens when there is rising or overflowing water spilling onto land that is normally dry. Examples of flood damage include overflowing of nearby bodies of water, rainwater getting into a basement because the soil is oversaturated, flash flooding or mud slides triggered by heavy rains, and storm surges causing an excess of water. Storm surges include weather phenomenon such as hurricanes. This means that if you live in an area frequently hit by hurricanes, but do not have flood insurance, any damage caused may not be covered.
Some homeowners may be reluctant to invest in this additional form of insurance, especially if they have not experienced flooding in a few years. However, families without this type of insurance can see their entire savings disappear after only one storm. When comparing homeowners insurance vs flood insurance, it is definitely worth the investment - especially since premiums in most areas across the United States have traditionally been more affordable that most other forms of insurance.
What To Do If You See Flood Or Water Damage
While the insurance implications are different depending on how the water got into the home, the immediate steps you should take are the same. It is crucial to familiarize yourself with this information, since many insurance plans require homeowners take all action required to reduce the impact of the damage on the home.
Try to dry all wet areas as soon as the water levels subside, providing plenty of air circulation to reduce the risk of mold. If there are any exposed areas, such as a hole in your roof or broken window, cover them up immediately, using a tarp or other material. This helps prevent further water damage, while also encouraging the dehumidification process. Finally, contact your insurance agent as soon as possible to start your claim.
Homeowners Insurance vs Flood Insurance - The Bottom Line
We hope this article on homeowners insurance vs flood insurance has been informative. It is important to get both comprehensive homeowner's insurance and flood insurance, especially if you live in a high-risk area.
Homeowners insurance protects your asset from common risks you may face throughout your time in the house. It can save you and your family hundreds of thousands of dollars in the event of damage, while also reducing the amount of stress you feel after experiencing a disaster.
Flood insurance is just as important. Trying to rebuild after experiencing a destructive flood is hard enough without worrying about how you can afford to repair your home. Insurance takes care of these worries for you.