Many homeowners don’t realize that their regular homeowners policies will not cover flood water damage. Your homeowners insurance will pay for water damage due to broken pipes, but not a flood. Flood insurance pays for damages caused by the rising of a body of water that covers land that is normally dry.
In 1968, Congress mandated federally regulated and insured lenders to require flood insurance on homes and properties that are in areas at higher risk of flooding. In some cases mortgage lenders require flood insurance even if you are not in a high risk area.
When you are considering a home, property, or business, you need to know if the property is in high risk area and, if so, determine just how much coverage you will need to protect your home and family. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage.