Should You Buy Flood Insurance?

However, if you live in a moderate- to low-risk zone, and your community belongs to the National Flood Insurance Program (most do), then you have the option of buying it.

If youre in the latter category, your first question probably is, How much does it cost? Federal flood insurance can cost just a few hundred dollars or as much as 10,000 a year, depending on your risk factor.

Some other facts that can help you make up your mind:

Your Homeowners Insurance Doesnt Cover Flood Damage

It only covers water falling from the sky. Once water touches the ground and enters your home, its a flood, and only flood insurance will pay for the damage.

For example, if a tree limb pokes a hole in your roof during a rainstorm, and rainwater damages your ceiling and floor, thats covered by your homeowners insurance. But if heavy rain causes the creek in your neighborhood to overflow into your home, thats covered only by flood insurance.

To be more precise, the National Flood Insurance Program uses this definition of a flood:

A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow.

Everyone Lives in a Flood Zone

Its just a matter of how much risk of flood there is. The NFIP can tell you your homes exact risk of flooding. But in a nutshell, zones A and V are high risk areas. Moderate- to low-risk areas are zones B, C, and X. If youre in zone D, the risk isnt clearly known because it hasnt been mapped yet. But you still can purchase flood insurance. The zones are used to help determine policy rates.

More Than 20% of Flood Insurance Claims Come From Moderate-to-Low Zones

Thats 1 out of 5. And thats not counting homeowners who werent insured and, therefore, couldnt file claims. No one knows how many uninsured there are, although only 18% of homeowners have flood insurance.

You Cant Count on Government Aid

Government aid comes largely in the form of loans, which you will have to repay. Before you can even qualify for a loan, your area has to be declared a federal disaster area, and federal disaster assistance is declared in less than half of all flooding events.

The Average Flood Claim is 30,000

But if you live where the water rises so high that emergency responders have to cut roof holes to rescue people, your potential flood loss could be quite a bit higher.

Cost of damage to a 2,000-sq.-ft. home by 6 inches of floodwater:

If You Decide You Want to Purchase Flood Insurance

To get an idea of how much coverage youll need, create a home inventory and then estimate the cost of repairing or rebuilding your home. Together, those two figures are your total potential loss.

A federal flood policy would cover rebuilding costs up to 250,000. You can also get a NFIP to cover up to 100,000 in possessions. One or both of those.

What Flood Insurance Covers

If your home would cost more than 250,000 to rebuild, you have to buy a private flood insurance policy called excess coverage to insure the value of your home above 250,000. Ask your insurance agent for options.

Questions to Ask Your Agent

FEMAs online flood map locator can estimate your premium and help you find an agent who sells federal flood insurance in your community.

When you talk to an agent, make sure you get answers to these questions:

• What will and wont be covered?

• Are there additional expenses or agency fees?

• Will my policy insure me for the actual cost of replacing items, or just what the items are valued at?

• Can my zone change, and therefore, my rates? The NFIP is reworking its maps, which is resulting in some potential rate changes.

Related: 7 Myths About Flood Insurance

Dona DeZube has been writing about real estate for more than two decades. She lives in a suburban Baltimore Midcentury modest home on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.