Homeowners' insurance typically covers rain that comes in from the top or side of a house — not through basements. In most cases, only homeowners who've bought flood policies from the federal government are insured against floodwaters that seep in through the bottom of the home.

Inside high-risk flood areas, only 28% of homes are covered by federal flood insurance in the Northeast, compared with 49% nationwide, according to the Rand Corp., a research firm. Outside high-risk areas, 0.6% of Northeast homes and 1% of homes in the USA are covered by flood insurance.

"We'd have to go back over three decades to find anything comparable to the type of flooding we're seeing in the Northeast," says Dennis Feltgen, a National Weather Service meteorologist. Flooding has caused damage in states including New York, New Jersey, Pennsylvania, Delaware and Virginia.

Federal flood policies pay for up to $250,000 in damage to the home's structure and $100,000 worth of damage to the contents. Those who have the government's policy, but whose homes cost more than this amount to replace, can buy additional coverage from a handful of insurance companies. To do so, a homeowners' policy with that company is often required.

Typically, "you'll get a flurry of people buying flood policies" after a major storm in the affected region, says Edward Pasterick, a senior adviser at the Federal Emergency Management Agency, which oversees the flood-insurance program. The problem is that, "if nothing happens in a year or two, they'll let (the policy) lapse."

Flood insurance doesn't kick in until 30 days after it's bought. Basic homeowners' policies, by contrast, typically take effect the day of purchase.

A policy owner should report damage to a home to the insurance company as soon as possible. Insurers sell and service flood policies for the federal government, so the same adjuster will typically assess whether wind, rain or flood caused the damage.

After last year's trio of deadly hurricanes, U.S. homeowners filed lawsuits saying insurers had denied their claims even when it was unclear what caused damage to their homes. In many of these cases, insurers said flooding — including storm surges resulting from a hurricane — caused the damage and isn't covered under the policies.

J. Robert Hunter of the Consumer Federation of America advises homeowners to take pictures of the damage and keep detailed notes about their interaction with the insurance company.

"There are a lot of (insurance) companies who will try to take advantage of you if you're not alert, and even good ones make mistakes" and deny claims, Hunter says.

source: www.usatoday.com