Occurring in all fifty States, floods are nationally considered the number one naturally caused catastrophe in the Unites States. In other words, it is not someone else's problem, especially when statistics show that flood damage happens in all three designated flood zones - high, medium, and low risk. What most people don't realize, however, is the fact that home owner's insurance does not cover flood damage! Flood damage is covered only by a flood insurance policy.
To better understand the risk of floods and flood damage, it is vital to first understand the nature of floods, and how they occur, thusly, assessing your own risk where you live. Flood is when large amounts of water flow where they are not supposed to flow. So where there are excessive amounts of water, there could be floods. This means floods can be caused by heavy rain, bad drainage systems, melting snow and ice, storms, hurricanes, or bad water controlling structure such as dams or levees. All of these elements make for a sudden movement of water, bypassing the normal flow process, and possibly causing floods. So living on an elevated piece of land, like a hill for example, does not necessarily protect you from being subjected to floods. Your house may have a bad drainage system which could fail when confronted by a sudden outpour of rain, melting snow, or even a local storm.
Fortunately, flood hazard maps have been developed for most of the United States classifying various regions as low, medium, or high flood-risk zones. The maps are developed using data such as local river flows, rainfalls, tidal forecast, topography, and structural analysis of your area. These maps can help you and help your insurance agent to assess the risk factors, and choose the proper flood insurance coverage for your home.
Purchasing a flood insurance policy is not only a good idea for home owners in all three risk zones to protect against flood damage, but is also mandatory if you live in a designated high-risk zone. It is usually the lender's legal obligation to require that you purchase a flood insurance policy covering the period of your ownership. Flood insurance policies are categorized in two major categories: a standard policy, and a preferred policy. The Standard Flood Insurance Policy offers three types of policies which may be necessary to purchase in order to cover flood damage not only to your building, but also to its contents. The Dwelling Policy covers residential buildings from one to four families and/or contents. The General Property Policy covers residential buildings with more than four families. The Residential Condominium Building Association Policy covers residential buildings owned by condominium associations. As for the preferred policy, it covers only low to medium risk zones and its premiums for both the building and its contents are very low compared to the standard policy. Finally, it is worth mentioning that the national program known as The National Flood Insurance Program (NFIP) usually covers entire neighborhoods against flood damage. Check with your local community to make sure whether or not your community covered under the NFIP, in which case you may not need to purchase your own flood damage policy.