Flood Insurance


Summary

This practice note will discuss flood insurance. Flood insurance is a genre of property and casualty insurance—not liability insurance or life and health insurance. Flood insurance is conceptually like other forms of insurance in that it transfers risk of loss from an individual or business (the insured) to a third party (the insurer). It indemnifies the insured for losses that are specified in the insurance policy but not all losses are covered and, like other kinds of property policies, losses may not be covered in full. Options are available to purchase actual cash value coverage, replacement cost coverage, coverage for the structure, contents coverage, as well as deductibles and other cost-sharing mechanisms. Like other kinds of property insurance, the insured's premium is predicated on numerous risk factors involving the property insured.