What is the purpose of flood insurance?

The purpose of flood insurance is to provide coverage for damages caused specifically by flooding. Flood insurance is designed to protect property owners, renters, and businesses from the financial burden that can result from flood-related incidents, which are typically excluded from standard property insurance policies. This type of insurance specifically addresses losses arising from the overflow of water onto land that is normally dry, as well as rising water from bodies of water, heavy rains, and other related events.

By focusing on flood-related damages, this insurance ensures that policyholders have financial assistance in the event of such natural disasters, allowing them to recover more effectively and rebuild after a flood. It is important to understand that while there are other types of water damage that may occur in properties, such as from burst pipes or water from heavy rains, these are not covered under flood insurance, which distinctly targets flooding events defined by specific criteria set by the National Flood Insurance Program (NFIP).