Standard homeowner’s insurance policies almost never cover flood damage…and that gap can be catastrophic. It takes only a few inches of water to destroy drywall, flooring, ­furniture and appliances. What you need to know…

Waterfront homes aren’t the only ones at risk. When people picture flooded homes, they imagine coastal properties slammed by a hurricane storm surge or low-lying homes near major ­rivers. But the Federal Emergency Management Agency (FEMA) is updating its flood maps, and many seemingly safe properties are being rezoned into “special flood hazard areas” for reasons as innocuous as a nearby creek that might overflow during a rainstorm.

When FEMA estimates that a home has a 1% or higher annual risk of flooding, its owners may be required to obtain flood insurance, assuming that they have a mortgage backed by federal loan guarantees. That insurance could cost thousands of dollars per year, and the flood zone designation could hurt the home’s resale value. You may be able to contest FEMA’s flood zone designation. On, select “Change Your Flood Zone Designation” from the Floods & Maps menu for details on how to do it yourself, or contact a surveying or consulting company.

Don’t automatically decline flood insurance if your home isn’t in a high-risk flood hazard area. About 25% of homes damaged by floods are not in FEMA-designated flood zones. Flood policies for homes in lower-risk areas tend to cost well under $1,000 a year.

FEMA’s National Flood Insurance program isn’t your only option. Most US flood insurance is obtained through the National Flood Insurance Program (NFIP). This coverage can be purchased through many insurance companies, but its terms are determined by the federal program’s rules and will be the same regardless of which insurer you choose.

That doesn’t mean you can’t shop around for flood insurance—in many areas, non-NFIP–flood coverage is available through the private market. Ask an insurance broker for quotes on NFIP and non-NFIP policies—but don’t choose solely on premiums. NFIP and non-NFIP flood coverage differ in important ways…

Long-term availability and pricing. If you choose a non-NFIP or private policy, the insurer can cancel your coverage or increase your rates at its discretion. An NFIP policy can’t be cancelled by the provider as long as you pay your premiums…and if the covered property is your primary residence, your rates can’t rise by more than 18% per year.

Lender requirements. If your mortgage lender insists that you obtain flood insurance because FEMA says your home is in a special flood hazard area, that lender might not accept a non-NFIP policy.

Coverage caps. NFIP coverage is capped at $250,000 for damage to the home and $100,000 for its contents. Non-NFIP policies often provide up to $1 million of coverage or more.

Basements. Some non-NFIP policies provide extensive coverage for possessions in basements, while NFIP policies provide only very limited coverage there.

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