A flood policy protects you from flood damage caused by the complete overflowing of inland or tidal waters onto the land or rapid and unusual accumulation of surface waters that put your home in jeopardy. In addition, damage caused by mudflows resulting from flooding related to a river with mud running over a surface of normally dry land areas is also covered.

While the chance that fire will strike a home is only one percent in the life of a 30-year mortgage, the chance of a home located in a flood-prone zone being ravaged by floods is 26 percent for that same 30-year span.

According to the Federal Emergency Management Agency, floods result in over $1 billion of property damage each year. Yet only one-third of Americans living in heavy flood zones have the insurance to handle it (homeowners insurance doesn't cover flood).

Federal flood insurance is the only type of coverage that protects your home and belongings from damage caused by rising water associated with flooding. Coverage includes structural elements, contents and personal items.