No. Flood damage is not typically covered by a homeowners insurance policy. 

Typically, no. In most cases, there is a 30-day waiting period from the time The National Flood Insurance Program (NFIP) policy is purchased until you are covered. You can apply for the coverage even if your property is currently experiencing flooding, but coverage won’t go into effect for 30 days.

Not necessarily. Federal disaster assistance typically comes in the form of a low-interest loan to help cover flood damage, not compensation for your losses. Even then, those loans are only available if the President formally declares a disaster and must be repaid along with any existing mortgage. The year 2011 was rather exceptional in Montana with presidential disaster declarations in 48 counties and on five reservations.

Simple Guide for Single-Family Homes

The answer seems obvious, but here’s the usual definition for insurance purposes: A flood is an excess of water (or mud) on land that’s normally dry. The National Flood Insurance Program (NFIP) defines a flood to be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder’s property) from overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; mudflow; or collapse or subsidence of land along the shore of a lake or a similar body of water as a result of erosion or undermining, caused by waves or currents of water exceeding anticipated cyclical levels.

 You must live in a community that participates in the National Flood Insurance Program (NFIP) to qualify for National Flood Insurance. Find out here if your community participates in the NFIP. If you live in a community that participates in the NFIP, you can get flood insurance to cover your home or business, as well as much of its contents. Private flood insurance may also be available in your area. We recommend calling a local insurance agent for details about the availability of flood insurance available in your area.

Private flood insurance is purchased from your insurance agent or company and does not receive any backing from the federal government.

The cost of flood insurance varies by individual policy based on many factors — including elevation of the building. The average National Flood Insurance policy in Montana is $572 a year, based on 2011 data from the Federal Emergency Management Agency. Private flood insurance may be available in your area and it may be more affordable than National Flood Insurance. Check with a local insurance agent for details about insurance available in your area.

No. Flood insurance covers buildings and building contents only.

Most likely, yes. It’s a good idea to buy flood insurance — even if you live in a moderate or low-risk area. Many people are financially vulnerable to floods. People outside of high-risk areas represent over 20% of NFIP claims and receive more than one-third of disaster assistance for flooding each year. When it’s available, disaster assistance is typically a loan you must repay with interest. You may qualify for the Preferred Risk Policy (a lower-cost flood insurance policy) that provides coverage for contents beginning at $49 per year, with building plus contents coverage starting at $129 a year. Nearly half of the flood insurance policies in Montana are Preferred Risk Policies (based on 2012 data).

During a 30-year mortgage, you are 27 times more likely to experience a flood than a fire.

Under federal law, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas (Special Flood Hazard Areas or SFHAs).

The amount of flood insurance coverage required by the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994, is the lesser of the following:

• The maximum amount of NFIP coverage available for the particular property type;
• The outstanding principal balance of the loan; or
• The insurable value of the structure.

If the property is not in a high-risk area, but instead is in a moderate-to-low-risk area, federal law does not require flood insurance; however, a lender can still require it. It is also recommended since historically one-in-five claims come from these moderate-to-low risk areas. Please note that if during the life of the loan, the flood insurance rate maps are revised and the property is re-categorized into a high-risk area, your lender may notify you that you must purchase flood insurance.