Flood loss vs. water loss: know the critical difference

August 29, 2025

When it comes to protecting your home, understanding the difference between a water loss and a flood loss can make all the difference.

According to the National Flood Insurance Program (NFIP), a flood loss occurs when rising water – from heavy rain, storm surge, overflowing rivers, or surface water – impacts at least two acres of normally dry land or affects two or more properties. In these cases, damage is not covered by your standard homeowners insurance. By contrast, water damage resulting in a water loss from burst pipes, appliance leaks or roof leaks during a storm is usually covered by a standard homeowners policy.

Compare your flood insurance options: NFIP vs. Beyond Floods

Feature	NFIP	Beyond Floods
Coverage limits	Max of $250k for building/$100k for contents	Higher limits available to better protect larger homes and valuables
Additional living expenses (ALE)	Not covered	Provides ALE for temporary housing and living costs while repairs are made
Replacement cost vs. actual cash value	Contents typically settled at actual cash value (depreciated)	Offers replacement cost coverage for personal property (no depreciation)
Basement and personal property coverage	Limited coverage for items in basement (e.g. appliances but not finished areas)	Broader protection, including finished basements and personal property
Extra protection	No coverage for mold or certain water backup situations	Includes options for mold remediation, water backup and more robust benefits
Claims process	Federal program with strict guidelines and longer timelines	Private market option with streamlined claims handling and direct support

Whether you live in a high-risk flood zone or not, flooding can happen anywhere – and with climate change driving more intense weather events, the risk is rising.

Did you know?

With National General’s Custom360^® product offerings, you can strengthen your coverage even further. Choose the Elite package and get $5,000 in water backup coverage included automatically, with the option to build up to $100,000!

Have questions about flood coverage options or Custom360? Reach out to your territory sales manager today. We’re available to answer your most important questions and help you grow your business!

Flood loss vs. water loss: know the critical difference

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