Flood Insurance
What Does Flood Insurance Mean?
Flood insurance is a type of property insurance that provides coverage for losses resulting from flooding or water overflow. Since standard homeowners insurance typically does not cover this risk, a separate policy must be purchased to ensure protection against flood-related damages.
Insuranceopedia Explains Flood Insurance
In the United States, only a limited number of companies offer flood insurance because the number of claimants significantly exceeds the number of individuals interested in this type of coverage; as a result, private insurers perceive the likelihood of making a profit as low. However, some mortgage lenders require flood insurance, particularly for high-value homes and properties located in high-risk areas. Nonetheless, the National Flood Insurance Program, established by the U.S. government, provides a flood insurance program for both private and public buildings while encouraging citizens to support and comply with flood management regulations.
