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Flood Figures

What does flood insurance cover? The federal policy, item by item

An NFIP flood insurance policy covers direct physical damage to an insured building and its contents caused by a flood, up to $250,000 for a residential building and $100,000 for its contents ($500,000 each for non-residential). Every NFIP policy uses the same federal contract — the Standard Flood Insurance Policy (SFIP) — so what is covered does not vary by insurer. The boundaries that matter most in real claims: building and contents are two separately purchased coverages, contents pay depreciated value, basements carry heavy limitations, and living expenses while displaced are not covered at all.

Building coverage

Building coverage insures the structure and what is permanently attached or essential to it. The SFIP’s covered list includes:

  • the building itself — foundation, walls, floors, staircases;
  • electrical, plumbing, and HVAC systems; water heaters; furnaces;
  • built-in appliances, permanently installed carpet over unfinished floor, cabinets and paneling;
  • detached garages (a limited share of building coverage extends to them; other detached structures need their own policy);
  • debris removal, and certain costs of protective measures when a flood threatens.

Valuation. A single-family primary residence insured to at least 80% of its replacement cost (or the $250,000 maximum) is settled at replacement cost. Other buildings — and any building under that threshold — settle at actual cash value: replacement cost minus depreciation. This threshold is the single most consequential sentence in the form for underinsured homes.

Contents coverage

Contents coverage is bought separately (a building-only policy pays nothing for furniture). It covers personal property inside the insured building — clothing, furniture, electronics, portable appliances — plus limited amounts for certain valuables (art, jewelry) and improvements a tenant installed. Renters can carry contents-only coverage, as covered in does renters insurance cover flooding?

Valuation. Contents always settle at actual cash value under the SFIP. There is no replacement-cost option for contents — a structural difference from many homeowners forms and from some private flood policies.

The basement rule

The SFIP defines a basement as any area with its floor below ground level on all sides — including many sunken living rooms and walk-out lower levels that owners don’t think of as basements. In basement areas:

  • Building coverage pays for structural elements and essential equipment: foundation walls, staircases, central AC, furnaces, water heaters, sump pumps, well and septic equipment, elevators, and cleanup.
  • It does not pay for basement finishing — floor coverings, drywall finishing beyond what the form lists, paneling, or personal belongings stored there.
  • Contents coverage in a basement extends only to clothes washers and dryers, food freezers and the food in them, and portable air conditioners.

A finished basement’s carpet, furniture, and entertainment setup are, in the main, uninsurable under the federal form — a boundary worth knowing before the water arrives, and one reason basement-heavy regions weigh private alternatives.

What is not covered at all

  • Additional living expenses — hotel, rent, meals while the home is uninhabitable. The SFIP has no analogue to homeowners “loss of use” coverage.
  • The land, landscaping, decks, fences, pools, hot tubs, septic fields as landscaping, docks, and most property outside the building’s footprint.
  • Vehicles (flood damage to cars runs through auto comprehensive coverage).
  • Currency, precious metals, and valuable papers.
  • Moisture, mildew, or mold damage the policyholder could have avoided, and damage from water that never met the flood definition — fewer than two acres or two properties inundated.
  • Business interruption and lost income — relevant to the non-residential form too; see flood insurance for businesses.

One coverage extends beyond repair: Increased Cost of Compliance, up to $30,000 toward elevating, relocating, or demolishing a substantially damaged building when the community requires it — detailed in the ICC guide.

Deductibles and how payment arrives

Building and contents carry separate deductibles, selectable from $1,000 to $10,000 each — the trade-offs are in the deductibles guide. After a loss, the claims process runs through notice, adjustment, and a proof of loss within 60 days; building and contents amounts are calculated and paid under their own limits and deductibles.

Frequently asked questions

Does flood insurance cover the cost of living elsewhere during repairs?

No. The SFIP pays for direct physical flood damage only; temporary housing is not covered under any NFIP option.

Does flood insurance cover a finished basement?

Only the structural elements and listed equipment. Finishing materials and nearly all contents in basement areas are outside the federal form’s coverage.

Are detached garages and sheds covered?

A detached garage shares a limited portion of the building coverage. Other detached structures require their own policies; fences, pools, and landscaping are excluded.

Does flood insurance pay replacement cost or depreciated value?

Buildings: replacement cost for a primary residence insured to at least 80% of replacement cost (or the maximum); actual cash value otherwise. Contents: actual cash value, always.

Is mold after a flood covered?

Mold and mildew damage is covered only to the extent it could not have been avoided by the policyholder after the flood — post-flood mitigation (drying, airing, documented cleanup) is part of the insured’s duties.

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