You may be surprised to find out that flood insurance is not included in your homeowner's insurance or renter's insurance policy. If a flood damages your home or possessions, you will have to take the entire loss yourself, unless you have a flood insurance policy. In the US, insurance against damages caused by flooding is offered primarily by the National Flood Insurance Program, which offers separate policies for homes in low-risk and high-risk areas. There are also some private insurers that offer flood insurance, such as The Private Market Flood program, underwritten by Lloyd's.

If your property is in a designated Special Flood Hazard Area (SFHA) you'll need flood insurance in order to secure property financing. When you buy a property, the seller is required by law to inform you if the property is in a SFHA. But it may be worth investigating this before buying a property, just in case. It usually isn't possible to find a private insurance that is willing to insure property located in an SFHA. Your only option in that case would probably be the National Flood Insurance Program. If you live in an area with a low risk of flooding, you would probably qualify for a Preferred Risk Policy which provides flood insurance at much lower premiums, and you will have the option of getting private insurance in many areas.

An important thing to keep in mind is that generally homeowner's, personal property, earthquake and renter's insurance will not cover the cost of damages caused by flooding - even if the cause of the damage is covered by your policy. For instance, if leaking water from pipes affected by an earthquake or act of vandalism damaged your home, your earthquake or homeowner's insurance probably won't pay for the water damages, as this would be considered flood damage. So even if you don't live in an area known for natural flooding, your home will be much better protected with this added coverage.

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