Standard Home Insurance Does Not Cover Flood

This is one of the most important insurance facts for property owners.

Standard homeowners insurance generally does not cover external flooding caused by rising water, groundwater, runoff or snowmelt.

Commercial property and renters policies also generally should not be assumed to cover flood.

Read more:Illinois Department of Insurance — Flood Insurance

Who Can Buy Flood Insurance?

Flood coverage is available through:

National Flood Insurance Program — NFIP

and

Private Flood Insurance

You do not necessarily need to live in a designated high-risk flood zone to purchase flood insurance.

Read more:FloodSmart — National Flood Insurance Program

When Is Flood Insurance Mandatory?

Flood insurance may become mandatory because of mortgage requirements.

Properties in a designated Special Flood Hazard Area with certain federally regulated, backed or insured mortgage financing generally must maintain flood insurance.

A lender can also impose flood-insurance requirements under circumstances permitted by the loan agreement.

Read more:Consumer Financial Protection Bureau — Flood Risk & Mortgages

Flood Can Happen Outside a Flood Zone

A property does not need to sit next to a river or lake to experience flooding.

Urban flooding may result from:

  • Heavy rain
  • Stormwater runoff
  • Overwhelmed drainage systems
  • Snowmelt
  • Nearby water accumulation

FloodSmart specifically warns Chicago-area residents that flooding can happen even away from Lake Michigan or the Chicago River.

Read more:FloodSmart — Chicago Flood Risk