Why is flood insurance separate from homeowners insurance...?

I’ve been wondering why flood insurance is sold separately from homeowners insurance. Back in the day, everything used to be covered, but now it’s a whole different story. Anyone know why it changed?

Yeah, flood damage is super unpredictable. Like, when it hits, it hits hard. And it’s not like fires or thefts that happen randomly… floods can take out entire neighborhoods. That’s why insurance companies avoid including it.

@Gracen
Oh, that makes sense. I hadn’t really thought about how unpredictable floods are. I live in a low-risk area, so I never worried about it much.

@Gracen
Yeah, it’s kinda wild. Insurance companies couldn’t keep up with the payouts, so the government had to step in with FEMA. They basically handle all the flood insurance now.

Flood insurance got taken out of homeowners policies a while back. The risks were just too high, and there weren’t enough people buying it to spread the risk. So now it’s government-backed.

PolicyPerspective said:
Flood insurance got taken out of homeowners policies a while back. The risks were just too high, and there weren’t enough people buying it to spread the risk. So now it’s government-backed.

Right, it’s all about spreading the risk. If only people in flood zones buy it, the premiums would be insane. So they had to separate it.

PolicyPerspective said:
Flood insurance got taken out of homeowners policies a while back. The risks were just too high, and there weren’t enough people buying it to spread the risk. So now it’s government-backed.

Exactly. Plus, some people who aren’t in flood zones just don’t want to pay for it. It wouldn’t be fair for them to pay for something they’ll never use.

Honestly, floods can bankrupt an insurance company. That’s why the government took over, to make it affordable for high-risk areas.

Jensen said:
Honestly, floods can bankrupt an insurance company. That’s why the government took over, to make it affordable for high-risk areas.

Totally! Imagine having to pay out for hundreds or even thousands of homes after one big storm… no wonder they pulled it from homeowners insurance.

Homeowners insurance covers stuff like fire and wind, but flooding? Nah, that’s a whole different level of damage. If you’re in a flood-prone area, you gotta get that separate policy.

Ainsley said:
Homeowners insurance covers stuff like fire and wind, but flooding? Nah, that’s a whole different level of damage. If you’re in a flood-prone area, you gotta get that separate policy.

Wait, so homeowners doesn’t cover ANY flood damage?

Ainsley said:
Homeowners insurance covers stuff like fire and wind, but flooding? Nah, that’s a whole different level of damage. If you’re in a flood-prone area, you gotta get that separate policy.

Nope, not at all. You’ll need flood insurance for that. Homeowners won’t help if your house gets flooded.

The risk of flood is just too massive. If insurers had to cover floods under regular homeowners policies, they’d go bankrupt. That’s why the government stepped in.

Ira said:
The risk of flood is just too massive. If insurers had to cover floods under regular homeowners policies, they’d go bankrupt. That’s why the government stepped in.

Right, and with climate change making things worse, floods are only gonna get more frequent.