A separate insurance policy that covers damage caused by flooding, which is excluded from standard homeowners policies. Flood insurance is available through the National Flood Insurance Program (NFIP) or private insurers and is required by lenders in high-risk flood zones.
Related Terms
Exclusion
A specific condition, situation, or circumstance that is not covered by an insurance policy. Common exclusions include flood damage on standard homeowners policies and intentional acts. Understanding your policy exclusions is critical to avoiding gaps in coverage.
Covered Peril
A specific risk or cause of loss that is included in an insurance policy. Fire, theft, windstorm, and hail are common covered perils in homeowners insurance. If a loss is caused by a peril not listed, the claim may be denied unless you have an open peril policy.
Homeowners Insurance
A policy that bundles coverage for your home's structure, personal belongings, liability protection, and additional living expenses into one package. The most common form is the HO-3 policy, which covers the dwelling on an open-peril basis and personal property on a named-peril basis.