Did you know that most homeowners insurance policies do not offer protection against flood losses? Standard homeowners policies will cover the damage a storm might cause to your home and possessions, but exclude damages from what is known as "rising water." Why? Insurance is essentially a device to spread risk, and few homeowners really need or would purchase this coverage. It is not feasible for a private insurance company to collect enough homeowners insurance to be able to afford to cover those who suffer the loss from flood. This would make the price an insurance company would have to charge to cover its losses too high.

However, flood insurance is available through the federal government's National Flood Insurance Program and can be purchased through any licensed property and casualty insurance agent. The NFIP requires all homeowners in all flood hazard areas in the country to purchase flood insurance thus spreading the risk over the greatest number of people and making the coverage both affordable to consumers and actuarially sound for the government to underwrite.

Flood is a "special occurrence coverage" limited to specific areas in which all the homeowners would likely experience significant losses at the same time. This special insurance is available for property in designated "flood zones" where the community has adopted sound flood management practices. Currently, there are about 18,000 communities participating in the NFIP throughout the United States.

Flooding is defined by the NFIP as a temporary condition of water overflowing normally dry land from inland or tidal waters or the unusually and rapid accumulation of surface waters from any source including rain. Mudflows are covered by the NFIP because they are flood conditions in which there is a flow of liquid mud over the surface of normally dry land,. In this case, the mud is carried by a current of water.

Although floods and mudflows are covered by the NFIP, landslides are not because it is a condition in which dry or damp earth or rock moves. Water does not directly contribute to the damage, even though a flood may trigger the slide.

Your insurance company will investigate the direct cause of the damage and determine if your homeowners or NFIP policy covers your loss from flood, mudflow, mudslide or earth movement.