What Does Flood Insurance Cover (and What Doesn't It)?

What Does Flood Insurance Actually Cover?

What does flood insurance cover? The short answer: damage to your home's structure and your personal belongings when floodwater gets inside. But the details matter more than most people expect, because some things you'd assume are covered aren't.

Flood insurance is a separate policy from your homeowners insurance. Your homeowners policy won't pay for flood damage, period. So if rising water from a bayou, storm surge, or heavy rainfall enters your home, flood insurance is the only thing standing between you and a massive repair bill.

There are two parts to a flood policy: building coverage and contents coverage. Here's what each one includes and, just as importantly, what falls through the cracks.

What Building Coverage Includes

Building coverage protects the physical structure of your home. Under an NFIP (National Flood Insurance Program) policy, building coverage maxes out at $250,000 for residential properties.

That covers:

• Foundation walls and the structural frame of your home
• Electrical and plumbing systems
• HVAC equipment, including furnaces, water heaters, and central air conditioning
• Built-in appliances like dishwashers and stoves
• Permanently installed carpet, cabinets, paneling, and bookcases
• Window blinds
• Fuel tanks, well water tanks, and solar energy equipment
• Detached garages (up to 10% of your building coverage amount)

Think of it as everything that would stay in the house if you picked it up and turned it upside down. If it's attached, built in, or part of the structure, building coverage generally handles it.

What Contents Coverage Includes

Contents coverage protects your personal belongings. The NFIP caps this at $100,000.

That covers:

• Furniture
• Clothing
• Electronics (TVs, computers, gaming systems)
• Portable appliances like microwaves and window AC units
• Washers and dryers
• Curtains and area rugs
• Food freezer contents (capped at $500)
• Artwork and furs (capped at $2,500 combined)

Contents coverage is optional under the NFIP, and a lot of homeowners skip it to save money on premiums. That's a gamble. FEMA estimates that just one inch of floodwater can cause around $25,000 in damage, but we've seen it go much higher. One of our clients had about an inch of water that came in and drained out in under 30 minutes. The repair bill was over $100,000. Continuous flooring throughout the home meant none of it matched once part was damaged, so all of it had to go. The bottom kitchen cabinets were ruined, and because the uppers wouldn't match the replacements, those had to be replaced too. He had a flood policy through us, so it was covered. Without it, that's a six-figure bill for 30 minutes of rain.

What Flood Insurance Does NOT Cover

This is where most people get surprised. Flood insurance has real limits, and some of the gaps are bigger than you'd think.

Outside the home. Landscaping, trees, shrubs, swimming pools, hot tubs, fences, patios, and decks are all excluded. If floodwater destroys your backyard, that's coming out of pocket.

Vehicles. Your car, truck, ATV, or motorcycle parked in the driveway when floodwater rolls through? Not covered by flood insurance. Your auto policy handles flood damage to vehicles, but only if you carry comprehensive coverage. Without comp, you're on your own.

Temporary housing. If your home floods and you can't live there while it's being repaired, the NFIP won't pay for a hotel, rental, or any additional living expenses. This is one of the biggest blind spots in standard flood policies. You could be displaced for weeks or months with no help from your flood policy covering housing costs.

Currency and valuables. Cash, precious metals, stock certificates, and other valuable papers aren't covered. If you keep important documents or valuables at home, a fireproof and waterproof safe is worth the investment.

Mold and mildew you could have prevented. If floodwater enters your home and you take reasonable steps to dry things out, mold damage from the flood itself is generally covered. But if mold spreads because you didn't address it in time, that's on you.

Financial losses. Lost income or business interruption from a flood event isn't covered under a residential flood policy.

These exclusions apply to NFIP policies specifically. Private flood carriers sometimes cover items the NFIP doesn't, which is worth knowing if any of these gaps concern you.

Replacement Cost vs. Actual Cash Value

This is one of the most misunderstood parts of flood insurance, and it can cost you thousands when you file a claim.

Building coverage can pay replacement cost, meaning what it actually costs to repair or rebuild. But there are conditions. Your home has to be your primary residence (you live there at least 80% of the year), and you have to carry coverage equal to at least 80% of your home's replacement cost or the NFIP maximum of $250,000. If you don't meet both conditions, your building claim gets settled at actual cash value, which factors in depreciation.

Contents coverage under the NFIP is always actual cash value. There's no replacement cost option. That means your 5-year-old TV doesn't get paid at what a new one costs. It gets paid at what a 5-year-old TV is worth today, which is a lot less. Same for furniture, electronics, clothing, and everything else.

This is a big deal when you're replacing an entire home's worth of belongings after a flood. During the 2016 Louisiana floods, the average NFIP claim payout was about $116,775. A significant portion of that went toward contents. If your contents were valued at ACV instead of replacement cost, the gap between what you received and what you actually spent to replace everything could be thousands of dollars.

How Private Flood Insurance Fills the Gaps

Some of the biggest NFIP limitations don't exist with private flood carriers. Private policies can offer higher coverage limits (well above the NFIP's $250,000/$100,000 caps), loss-of-use coverage for temporary housing, and replacement cost on your contents instead of depreciated value.

If any of the NFIP exclusions in this article concern you, a private policy might be a better fit. We wrote a full comparison of NFIP vs. private flood insurance that breaks down where each option wins and when one makes more sense than the other.

Don't Forget the 30-Day Waiting Period

NFIP policies have a 30-day waiting period before coverage kicks in. You can't buy a policy when a storm shows up in the Gulf forecast and expect it to protect you.

There are two exceptions. If you're buying flood insurance as part of a home purchase with a federally backed mortgage, coverage starts immediately at closing. And if your property gets remapped into a high-risk flood zone, the waiting period drops to one day as long as you buy within 13 months of the map change.

Some private carriers offer shorter waiting periods of 10 to 14 days, and a few have no waiting period at all. Either way, the smart move is buying well before you need it. Our hurricane insurance checklist covers what else to review before storm season.

Know What You're Paying For

Louisiana has received over $20 billion in NFIP claim payouts since 1968, more than any other state. Flood insurance is one of those things where the details really do matter. The difference between what you think your policy covers and what it actually covers can be tens of thousands of dollars when you're standing in a flooded living room.

If you already have a flood policy, pull it out and check your limits, your deductible, and whether you're carrying building coverage only or building plus contents. If you're not sure what you have or what you might be missing, we're happy to walk through it with you.

For a breakdown of what Louisiana homeowners typically pay, check out our guide on flood insurance costs across the state. And if you're still deciding whether flood insurance makes sense for your situation, here's our take on whether you need flood insurance in Louisiana.

Frequently Asked Questions

Does flood insurance cover my car?

No. Flood insurance only covers your home's structure and the contents inside it. Flood damage to your vehicle is covered by your auto insurance policy, but only if you carry comprehensive coverage. Without comp, flood damage to your car comes out of pocket.

Does flood insurance pay for a hotel if I can't live in my home?

Not under the NFIP. Standard NFIP policies do not include loss-of-use or additional living expense coverage. If your home floods and you need somewhere to stay, those costs are on you. Some private flood insurance carriers do include temporary housing coverage, which is one of the biggest differences between the two options.

What's the difference between flood damage and water damage?

Flood damage comes from water rising on the outside and entering your home, like an overflowing bayou, storm surge, or heavy rain that overwhelms drainage. Your homeowners policy doesn't cover this. Water damage from things like burst pipes, a leaking roof, or an overflowing bathtub is typically covered by your homeowners insurance. The source of the water determines which policy pays.

Does my lender require flood insurance?

It depends on your flood zone. If your property is in a high-risk zone (A, AE, V, or VE) and you have a federally backed mortgage, your lender requires flood insurance. If you're in Zone X, most lenders don't require it, though you can still buy a policy. Even without a lender requirement, flood coverage is worth considering since more than 40% of NFIP claims come from outside high-risk zones.

Ready to see what flood coverage looks like for your home? Get a free flood insurance quote and we'll compare NFIP and private options side by side.