Floods are dangerous, destructive events that can be financially devastating. In fact, just one inch of water inside a home or building can result in many thousands of dollars in damage.

Homeowners often turn to an insurance company following unexpected damage to their house and personal belongings. Many are under the false impression that insurance covers all losses. In reality, homeowners insurance is a legal contract that outlines what is and is not covered. Losses that are not covered are called 'exclusion.' Flood-related damage is among the exclusions found in standard homeowners insurance policies.

Insurance protection is available for flood damage, but only as a separate, stand-alone policy. Coverage is available through the National Flood Insurance Program as well as a few private insurers. Your local homeowners insurance agent can provide cost and coverage details. Basics to keep in mind:

• Protection begins 30-days after the policy's effective date. Waiting too long to buy flood insurance could result in no coverage.
• Dwellings can be insured up to $250,000; personal belongings up to $100,000.
• Flood insurance is available in both high and low risk participating communities that agree to adopt and enforce regulations to reduce flood losses.
• Lenders require flood insurance on properties located in flood zones. Flood insurance is optional for others, but worth looking into.
• Flood claims are paid even if the affected location is not recognized as a federal disaster area. Taking a high deductible lowers the premium but you pay more out-of-pocket when a loss occurs.
• Flood insurance has limitations. For example, it does not cover temporary relocation costs, basements, landscaping and more.

Victims without flood insurance have few options to pay for damage. A low interest loan (which must be paid back) may be available if the flood area receives a Presidential Disaster Declaration. Victims may qualify for a FEMA disaster grant, but the amount will likely be far less than the cost of repairs. More often, flood victims pay for repairs and replacing personal belongings out of pocket.