Why won't my insurance company pay for damage caused by a flood?

Why won't my insurance company pay for damage caused by a flood?

Sam Friedman (Editor-in-Chief, National Underwriter, Property & Casualty Edition) gives expert video advice on: Why won't my insurance company pay for damage caused by a flood?; Why won't my insurance company pay for vermin damage or extermination? and more...

Historically, floods have been excluded from standard home owner's policies, although flood insurance is available from the federal government through the National Flood Insurance Program. Your agent or broker can arrange to get you coverage through the federal program, as well. One of the reasons that standard home owner's insurance doesn't cover flood is that people have been increasingly building close to the coastlines, where flooding is most prevalent, or in basins in areas of low land around water, where flooding happens all the time. Insurance is supposed to cover you against contingencies that are possible, but are not likely to happen. If you build a home next to a river that has flooded every four years for the last hundred years, that is not a contingency; it's a certainty. A standard home owner's insurer will not cover you for that, but as a public policy issue, for an additional premium, you can buy overlying coverage from the federal government to do that, and I strongly suggest anyone who lives in an area that has any sort of history of flooding, if you are anywhere near a body of water that overflows on any regular basis, to go for that coverage. It's worth the extra money.