Flood Insurance (NFIP vs. Private)
Definition:
Separate insurance that covers property damage caused by flooding.
Explanation:
Standard homeowners policies exclude flood damage. Coverage must be purchased separately through the National Flood Insurance Program (NFIP) or private insurers.
Example:
If a river overflows and floods your basement, homeowners insurance won’t pay, but a flood policy will.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.