How flood insurance works, and the 30-day wait

A standard homeowners policy doesn't cover damage from a flood, and most renters insurance doesn't either. Flood coverage is a policy of its own, and a new policy has a waiting period.

Where flood insurance comes from

The National Flood Insurance Program is a federal program managed by FEMA. Its policies are sold through a network of insurance companies and agents. The program sets its rates, so they're the same across providers.

Private flood insurers sell coverage too. Renters and businesses can buy flood coverage as well as homeowners.

The 30-day wait

An NFIP policy goes into effect 30 days after your date of purchase, with a few exceptions:

• Buying with a mortgage. There is no wait when the coverage is tied to making, increasing, extending or renewing a loan.
• A change at renewal. There is no wait when you change coverage during a renewal.
• A new flood map. There is a one-day wait if the property was newly placed in a high-risk flood zone and you buy within 12 months of the map change.

The limits

NFIP building policies for homeowners cover up to $250,000 of flood damage. Contents coverage for belongings is capped at $100,000 for homeowners and renters. Contents coverage is optional and bought separately from building coverage.

The rate and the term

Three things set an NFIP rate: where the property is built, how it's built and what it would cost to replace it. A policy lasts one year, and building and contents coverage carry separate deductibles.

The basement

For the NFIP, a basement is any area of a building with a floor below ground level on all sides. In a basement, building coverage is limited to specific items and cleanup. The flood policy lists which items those are.

An annotated example

What to do next

Check your homeowners policy's exclusions for flood. While you're in the basement, write down the manufacturer, model, serial number and capacity of the furnace, water heater and other equipment there. Do it before a flood, because the adjuster needs those details during a claim.