Understanding the Difference Between Flood Insurance and Homeowners’ Insurance

Taking out a homeowners’ insurance policy can be a simple process for many families. So simple, most homeowners don’t put much thought into the process. They know that home insurance is a necessity that they need to protect their property and personal belongings from damage or theft. But, what about those who live in areas that are prone to flooding? Will their basic home insurance policy cover damage caused by a flood, or will they need to take out additional flood insurance?

The topic of flood insurance can turn the simple process of taking out a homeowner’s insurance policy on its head. There are many people who believe that homeowners insurance and flood insurance are the same thing. Unfortunately, they only learn the truth after they are faced with serious water damage that requires expensive repairs. When taking out an insurance policy, it’s important to discuss the terms with an agent and learn exactly what coverage you are paying for.

What is Homeowners’ Insurance?

Homeowners’ insurance is designed to provide homeowners with the financial protection that they need in the event of a disaster or an accident involving their property. Most homeowners have a standard homeowners’ insurance policy. This ensures that the structure of the main home and all the personal belongings inside it are covered in the event they are damaged or destroyed. One common example of destruction that homeowners insurance covers is damage caused by a house fire.

What is Included in Standard Homeowners’ Insurance Policies?

When shopping around for home insurance, remember that what an insurance company decides to include in their standard policy can vary. Some may include liability insurance, which will protect you from paying out legal fees or medical expenses if someone is injured on your property. At the same time, other companies may require you to purchase liability insurance separately. That’s why it’s so important to carefully review your policy before you sign any documents and ask the agent questions if you are unsure about your level of coverage.

Are there Additional Types of Homeowners’ Insurance Policies?

While standard homeowners’ insurance policies are the most popular, there are plenty of additional options out there that meet the ever-changing needs of today’s property owners and renters. Most popular homeowners’ insurance providers now offer policies for condominium owners, landlords, and renters insurance.

All types of homeowners’ insurance policies provide additional living expense (ALE) coverage. This will provide you with additional reimbursement if you must live away from your home at a hotel or another location while waiting for home repairs to be completed.  

What isn’t Covered by a Standard Homeowners’ Insurance Policy?

While the exact details will vary from one company to the next, most do not include flood insurance or earthquake insurance with their standard homeowners’ insurance policies. These are viewed as separate policies since not every homeowner will require this type of coverage.

What is Flood Insurance?

Flood insurance is additional coverage that a homeowner can purchase to help protect their home from damage due to flooding. It can provide coverage for your home’s structure, its foundation, plumbing and the electrical system. It can also help protect any attached furnishings such as cabinets or bookcases. Flood insurance may also cover personal belongings such as clothing, furniture, appliances, and electronics.

Circumstances that aren’t covered by flood insurance may include mold or mildew damage to the home, jewelry, outdoor property such as detached garages, decks, or hot tubs, and living expenses for temporary housing.

Do I Need Both Homeowners’ and Flood Insurance?

While it is better to be safe than sorry, if you don’t live in an area prone to flooding, and there is little chance that you will endure severe water damage to your property due to a heavy storm, you should be fine with a standard homeowners insurance plan. Sometimes flood insurance will be required in terms of your home’s mortgage. If that is the case, then you will need to carry it to avoid any penalties. But if you do not live in a flood zone, you are not obligated to carry it. The choice is up to you.

Purchasing a home is the most important investment that you will ever make. Be sure that it is protected from damage, theft, and destruction by taking out the right homeowners insurance plan to suit your needs. Get the facts about your home insurance policy before you sign the documents. And if you already have a policy in effect, make sure you know exactly what’s covered before you are faced with a disaster. Remember that while not everyone is obligated to purchase flood insurance, even the smallest amount of water damage can be destructive to your home.

We’re Here to Help

Call our office at (850) 942-7760 to learn more about all of our homeowners insurance and other personal and commercial insurance options.

Demont Insurance Agency, Inc. The Insurance You Need, The Assurance You Deserve.

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