Individuals who live near rivers in cities and towns are often required to have flood insurance. This is a policy that is separate from standard homeowners insurance coverage. Homeowners policies exclude all damage that is caused by flooding. This means any server rainfall that leads to the overflow of a river is likely to cause damage to low-lying homes. The only way for homeowners to be covered for any type water damage is to have a flood insurance policy.

Background

The National Flood insurance Program was created by Congress in 1968 and has two goals. The first is to allow a homeowner to purchase insurance for protection against future flooding. The second was the encouragement of communities to develop measures to help reduce future risks due to flooding. This is a program that has made the availability of flood protection possible for many homeowners.

Flooding

Flooding occurs when an otherwise dry area becomes inundated with water. Water can result from tidal water or the overflow of inland water. Runoff from heavy rains can accumulate in an area and may cause to a temporary flooding condition. Rising rivers that overflow their banks and cause mud flows are also types of flooding.

Need

Properties that are not located near the ocean or are in an area that is high-risk for flooding may still be at risk for flooding. Many low-risk areas near small rivers often have seen flooding over time. If there is a flood in a city due to the overflow of a river, then homeowners without flood insurance are out of luck if their home is damaged. Contact a local insurance agent to see if a flood policy may be an asset. Maps provided by the Federal Emergency Management Agency will show any flood hazards that exist in a community with or without a river.

Requirements

Areas that are prone to flooding or properties that are close to a river often see occasional flooding. If a homeowner has a mortgage from a bank or other lender, then flood insurance may be required. Lenders will often require flood insurance for properties located near rivers or other bodies of water. This will not be be optional when a homeowner has a mortgage.

Purchase

Flood insurance is sold by the same insurance companies that provide a homeowners policy. A property owner will need to check with their insurance agent about the availability of flood insurance. There is a specific coverage limit and a 30-day waiting period. This means a homeowner cannot purchase a policy if there is an immediate threat. The only exception is for polices needed to satisfy the requirements of a mortgage lender. Coverage for a flood policy is effective on the closing date.