Definition - What does Flood Insurance mean?
Flood insurance is insurance that protects a policyholder from financial losses that can occur as a result of water damage from a flood. Floods can cause major damage to both building structures and their contents. In the context of the law, the government makes it mandatory for homeowners in specific regions of the country to own flood insurance. This is because certain areas carry a high risk of floods.
Justipedia explains Flood Insurance
If a building is damaged from a flood, the losses can be immense. The building itself can become rotten and moldy, and require tens or even hundreds of thousands of dollars' worth of repairs. Also, the majority of the contents—including furniture, paintings, clothing, etc.—can all be ruined. Without flood insurance, the homeowner may not receive any sort of reimbursement for these losses. This is because flood insurance is typically not included in a typical insurance policy. So, for those at risk, flood insurance can be very important to prevent losses.
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