What is "flood insurance," and who typically requires it?

Flood insurance specifically provides coverage for damage to property and belongings that can result from floodwaters. It is a critical type of insurance for homeowners, business owners, and renters who live in areas identified as flood-prone by various governmental agencies, such as the Federal Emergency Management Agency (FEMA). Many mortgage lenders mandate flood insurance for properties located in designated flood zones to protect their investment, as standard homeowners insurance typically does not cover water damage from flooding.

Properties in high-risk areas, those situated near rivers, lakes, or coastal regions, are particularly vulnerable to flooding. Therefore, acquiring flood insurance not only fulfills lender requirements but also offers essential financial protection against potentially devastating damages that can occur as a result of flooding events. This specialized coverage is especially important for homeowners and property owners in these locations, reinforcing the need for awareness and preparedness regarding flood-related risks.