Investigate your flood insurance options
Home insurance often covers some kinds of water damage, but generally only from sources that are part of your home, such as plumbing and appliances. If the water entered your property as a result of a body of water over-flowing its banks the damage is not covered. You can only make claims on such damage if you have an additional flood insurance policy.
The federal government sponsors a National Flood Insurance Program (NFIP), which allows home and business owners and renters to purchase flood insurance. If your community participates in the NFIP (check at http://www.fema.gov/fema/csb.shtm) by observing certain floodplain management practices, you can purchase additional flood insurance.
Although backed by the federal government and thus, depending on where you live and other factors, relatively inexpensive, you can purchase flood insurance through local insurance companies.
According to the NFIP, a typical home is nearly three times as likely to face a flood as a fire during the course of a 30-year mortgage. Even homes far from the coast or any bodies of water are at risk for flash floods due to torrential rains, new development, and snow melt. Flood damage can be extremely costly—according to the NFIP the average claim during the past 10 years has been about $33,000. Outside of insurance the only assistance flood victims may receive from the government comes in loans which must be paid back with interest. In addition, these are only available when the President declares a disaster. So purchasing a flood insurance policy is the best way to defray potentially ruinous costs in the future. And the more people participate in the program, the lower premiums will be.
In spite of all this, many Americans neglect to purchase flood insurance. This may be because of common misconceptions about insurance. For example, according to the Federal Emergency Management Agency (FEMA) 50% of low-flood risk homeowners believe that they cannot purchase flood insurance since their home is not located in a high-risk area. In fact anyone in a participating community can purchase, and the rates will be lower for purchasers in lower risk areas. (To check your risk of flooding you can visit http://www.floodsmart.gov/floodsmart/pages/videos/ videoindex.jsp.) Renters can also purchase insurance on their belongings.
Flood damage is not covered by general home insurance, and flooding is actually a surprisingly common and very costly risk. Because of this, it can be a good idea to investigate flood insurance. Consult federal web sites to better understand your risk and talk to your home insurer to find out about local availability.