What does flood insurance not cover?

Flood insurance covers a lot, but it does not cover everything. Several common types of damage and property are excluded from standard flood policies, especially those through the National Flood Insurance Program (NFIP). Knowing these gaps ahead of time helps you plan, budget, and explore supplemental coverage where it makes sense.

Common exclusions under NFIP policies

• Temporary housing and loss of use: The NFIP does not pay for hotel stays, rental housing, or other additional living expenses while your home is being repaired. This is one of the biggest gaps for homeowners.
• Basement improvements: Finished basement walls, flooring, and personal property stored in basements are generally not covered. Only essential equipment in basements—like furnaces, water heaters, and circuit breakers—is covered.
• Cars and vehicles: Flood damage to your car is covered by your auto insurance (comprehensive coverage), not your flood policy.
• Precious metals, currency, and valuable papers: Cash, stock certificates, and precious metals are excluded.
• Outdoor property: Landscaping, fences, decks, patios, swimming pools, hot tubs, and septic systems are not covered by NFIP policies.
• Mold and mildew: Damage from mold or mildew that could have been prevented by the homeowner is typically excluded.
• Earth movement: Damage caused by mudslides, sinkholes, or land erosion—even if triggered by flooding—is excluded.
• Financial losses: Lost income, business interruption, and other financial losses resulting from flood damage are not covered.

Coverage is actual cash value for contents

Under the NFIP, personal property claims are settled on an actual cash value basis, meaning depreciation is subtracted. A five-year-old television will not be reimbursed at its full replacement cost. Some private flood insurers offer replacement cost for contents, which closes this gap.

Private flood insurance may fill some gaps

Private flood carriers sometimes cover loss of use, offer replacement cost on contents, provide higher limits, and include items the NFIP excludes. However, coverage varies by carrier, so read the policy terms carefully.

What Truscott recommends

Understanding what your flood policy excludes is just as important as knowing what it covers. If any of these exclusions concern you, a Truscott coverage review can help you evaluate whether a private flood policy or supplemental coverage makes sense for your situation. Reach out for a policy checkup so you are not caught off guard.