Flood vs. Windstorm Damage

One factor to consider when purchasing a flood insurance policy is the distinction between damage caused by flooding and damage caused by wind.

Damage to real or personal property from flooding usually is not covered under a standard homeowner’s, general business, or renter’s insurance policy. For insurance purposes, a flood is a general and temporary condition, during which the surface of normally dry land is partially or completely inundated with water. Flooding can be caused by: an overflow of tidal or inland waters; a runoff, such as from rainfall; a mudslide or mudflows caused by flooding; or the soil erosion exceeding normal levels, which causes collapse of land along a body of water. This is the only type of insurance that provides coverage against losses from floods and is offered by the NFIP and private insurance companies.

Wind damage, on the other hand, is generally covered under a standard homeowner’s, business, or renter’s insurance policy. Wind damage is not covered under a flood insurance policy.

For a resident, business owner, or renter, located in a low-to-moderate risk area for flooding, the distinction between flood and wind damage is important because to insure against flood damage, the resident, business owner, or renter must purchase a separate insurance policy to cover floods. The NFIP estimates that the cost of a standard insurance policy is under $200 a year. Together, the cost of a flood insurance policy and the cost of a standard homeowner’s, general business, or renter’s insurance policy may be affordable to some, while expensive to others.

A potential purchaser must weigh the benefits of having a flood insurance policy in a low-to-moderate risk area for flooding, against the risks of not having a policy and being without coverage in the event of a flood in his or her area.