What is the main purpose of flood insurance?

The main purpose of flood insurance is to provide financial coverage in case of flooding. Flood insurance is specifically designed to protect property owners, renters, and businesses from the financial repercussions of flood damage, which may not be covered under standard homeowners or commercial property insurance policies. This specialized insurance policy offers compensation for loss or damage caused by floodwaters, allowing policyholders to recover and rebuild after such an event.

In areas prone to flooding, many properties are at risk due to heavy rainfall, storms, or nearby water bodies overflowing. Flood insurance can help cover the costs of repairs to buildings and replace personal property, which is crucial for financial stability in the aftermath of a flood. Given that flooding can lead to significant destruction, having dedicated flood coverage ensures that individuals and businesses can receive the necessary support to recover effectively.