Homeowners Insurance VS Flood Insurance: What You Need to Know
When it comes to protecting your home, understanding your insurance options is crucial. Many homeowners assume that their homeowners insurance covers all types of disasters—including floods. Unfortunately, that assumption can be a costly one. In reality, homeowners insurance and flood insurance are two distinct policies, each offering protection from different risks.
At HANDS, we aim to make housing education accessible and practical. In this article, we’ll explain the key differences between homeowners insurance and flood insurance, what each policy covers, and when you might need one, the other, or both. If you’re a homeowner or planning to become one, this guide will help you make informed decisions about protecting your property.
What Is Homeowners Insurance?
Homeowners insurance is a policy that provides financial protection against damages to your home and personal belongings due to a variety of covered events. It also offers liability coverage if someone is injured on your property.
What Does Homeowners Insurance Cover?
Most standard homeowners insurance policies include:
- Dwelling coverage: Repairs or rebuilds your home if it’s damaged by covered perils such as fire, windstorms, or vandalism.
- Personal property coverage: Covers items like furniture, electronics, and clothing if they are stolen or damaged.
- Liability protection: Helps with legal expenses if someone is injured on your property.
- Additional living expenses: Pays for temporary housing if your home is uninhabitable due to a covered event.
What It Does NOT Cover
One of the most important exclusions in standard homeowners insurance policies is flood damage. Damage caused by flooding, whether from heavy rain, hurricanes, or rising rivers, is not covered. For that, you need a separate flood insurance policy.
What Is Flood Insurance?
Flood insurance specifically protects your home and belongings from water damage caused by flooding. It is usually offered through the National Flood Insurance Program (NFIP), but some private insurers also provide policies.
What Does Flood Insurance Cover?
Flood insurance typically includes two types of coverage:
- Building property coverage: Covers the physical structure of your home, including the foundation, electrical and plumbing systems, HVAC, and built-in appliances.
- Personal contents coverage: Protects personal items such as clothing, furniture, and electronics.
Common Flooding Sources Covered:
- Overflowing rivers or lakes
- Heavy rain
- Melting snow
- Storm surges
- Broken levees or dams
What It Does NOT Cover
- Damage from sewer backups (unless directly caused by flooding)
- Temporary housing or additional living expenses
- Landscaping, pools, or decks
- Most vehicles
Why Doesn’t Homeowners Insurance Cover Flood Damage?
This is a question we hear a lot at HANDS: Why do I need flood insurance if I already have homeowners insurance?
The simple answer: Flooding is considered a high-risk event and is treated as a separate hazard. Insurance companies handle it differently due to the extensive damage and high costs floods can cause. As a result, you must purchase flood insurance separately to be protected from water damage caused by flooding.
Do You Need Both Types of Insurance?
When Homeowners Insurance Is Enough
If you live in an area with low flood risk and your lender does not require flood insurance, homeowners insurance might be sufficient—but only for the covered events listed in your policy (fire, wind, theft, etc.).
When You Should Have Flood Insurance
You should seriously consider flood insurance if:
- You live in a high-risk flood zone
- Your mortgage lender requires it
- Your home is located near coastlines, rivers, or floodplains
- You want peace of mind regardless of FEMA flood zone classifications
When You Need Both
If you want comprehensive protection for your home, having both policies is the best option. Homeowners insurance and flood insurance work together to fill coverage gaps.
Comparing Policies: Homeowners vs Flood Insurance
| Feature | Homeowners Insurance | Flood Insurance |
| Covers flood damage? | No | Yes |
| Covers fire/wind/hail? | Yes | No |
| Covers theft or vandalism? | Yes | No |
| Covers personal belongings? | Yes | Yes (if selected) |
| Covers temporary housing? | Yes | No |
| Required by mortgage lender? | Often | Only in high-risk zones |
How to Determine If You Need Flood Insurance
Flood insurance may be required by your lender if your home is in a high-risk area. Even if it’s not required, you can check your flood risk using FEMA’s Flood Map Service Center. Keep in mind:
- 20% of flood claims come from low or moderate risk areas
- Flooding can occur anywhere it rains
- Just one inch of water can cause $25,000 or more in damage
Talk with your insurance agent and HANDS’ local Housing Counselors to understand your risks and options.
How Much Does Flood Insurance Cost?
The cost of flood insurance depends on:
- Your property’s flood zone
- The elevation of your home
- Type of coverage selected
- Deductible amount
- Whether the policy is through NFIP or private insurers
On average, flood insurance through NFIP costs about $600 per year, but rates can vary.
How HANDS Can Help
At HANDS, we know navigating insurance can be overwhelming. We’re here to:
- Help you understand your flood risk by connecting you to home insurers
- Connect you with HANDS’ local Housing Counselors
- Offer educational resources to help you make informed decisions
We believe in empowering homeowners through knowledge and support. If you have questions about homeowners or flood insurance, reach out to our team.
FAQ: Insurance Questions Answered by HANDS
Does renters insurance cover flood damage?
No. Renters insurance, like homeowners insurance, does not cover flood damage. You can purchase separate flood insurance for your personal belongings.
What if I can’t afford flood insurance?
In some cases, assistance programs or FEMA grants may help cover recovery costs after a declared disaster. HANDS can also help you explore options for affordable housing and protection.
My lender doesn’t require flood insurance. Should I still get it?
If you live in a moderate- or low-risk area, it might not be required—but that doesn’t mean you’re not at risk. One in five flood claims come from these areas. It’s worth considering.
How do I buy flood insurance?
You can purchase flood insurance through your insurance agent or through the National Flood Insurance Program. Policies typically take 30 days to go into effect, so don’t wait until a storm is on the way.
Will my flood insurance cover basement flooding?
It depends. Flood insurance may cover structural elements in the basement and essential systems (like your furnace or water heater), but personal belongings stored in the basement may not be covered.
Final Thoughts
Floods are the most common and costly natural disaster in the U.S. — but many homeowners don’t realize they’re vulnerable until it’s too late. Homeowners insurance and flood insurance work together to protect your biggest investment. Understanding what each covers, and where the gaps are, is the first step toward peace of mind.
If you need help understanding your options or determining your risk level, HANDS is here to help. We provide the tools and guidance to keep your home—and your future—secure. Contact us today!