As hurricanes and tropical storms close in, millions of homeowners may be scrambling to figure out whether or not they have the proper flood insurance. Others are breathing a little easier, secure in the knowledge that they've already purchased coverage.
But even if you have flood insurance, you could be in for a post-storm surprise. Here are five circumstances where flood insurance might not protect you.
1. Flooding occurs within 30 days of a new policy
Flood insurance policies have a 30-day waiting period. So, if you haven't bought coverage already, you'll just have to hope for the best as the storm passes though.
"We always encourage people to educate themselves on what their home's risk might be, and talk to their insurance agent well before there's a storm on the horizon or any type of flooding situation [that] would come up," Loznicka says.
There is an exception to the 30-day rule, and that's if the policy is issued as part of a lender requirement for a new mortgage or home refinancing, Racusen says.
In those cases, the new policy connected with the lender requirement is effective at the time of the loan closing as long as the flood insurance application and payment of the full premium are executed before the closing, she says.
Once a flood insurance policy goes into effect, it lasts for one year, provided that it's not terminated, Racusen says.
2. You have building losses above $250,000
A standard home insurance policy does not cover floods, but you have the option of buying federally backed flood insurance if your community participates in the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA).
However, under NFIP, "building property coverage" is capped at $250,000, says Rachel Racusen, a spokeswoman for FEMA. Likewise, NFIP has a limit of $100,000 in coverage for the contents of a home.
If your house or the property in it is valued at more than those limits, you could be at risk of being underinsured.
To protect yourself and your belongings, it's important to determine if you need additional coverage, says Christina Loznicka, a spokesperson for Allstate Insurance in Northbrook, Ill.
"Ask your insurance agent if you're eligible to purchase excess flood insurance, which is offered by private insurers," she says.
Such policies can provide up to several million dollars of extra coverage. Policyholders must first purchase NFIP coverage before they can buy the extra coverage, Loznicka says.
"The [NFIP] premiums average $540 a year for $100,000 worth of building coverage," she says.
Excess flood insurance, which has widely varying premium rates, would be an additional charge. Homeowners can learn more details at www.floodsmart.gov.
3. You've made improvements to your basement
Under NFIP guidelines, a basement is defined as any area of a building that has its floor below ground level on all sides, says Racusen.
The "building property coverage" part of flood insurance covers some portions of a basement from flood damage, such as foundation walls, drywall for walls and ceilings, furnaces and hot water heaters.
You can also purchase "property contents coverage" to protect items such as a washer, dryer or food freezer in the basement, Racusen says.
However, neither aspect of flood insurance covers cosmetic improvements to basements. So if storm-related flooding damages new furniture or carpeting, it will not be covered. Neither will damage to things like new sinks or bathtubs.
In the event of a flood, a standard homeowners insurance policy won't cover those damages either, Racusen says, so you'll likely will have to pay out of pocket to replace them.
4. Your landscaping is damaged
Flood insurance covers damage to buildings, but it won't pay for damage to surrounding areas, Racusen says.
That means plants, trees, shrubs and other items beyond the perimeter walls of a home are not insured, she says.
5. You need temporary living expenses
If your home is uninhabitable after a storm or hurricane because of a flood loss, your policy generally won't cover temporary housing expenses. This is why it's important to set aside savings to pay for unexpected expenses – such as short-term housing – that aren't insured.