What is the primary function of flood insurance?

The primary function of flood insurance is to provide protection against losses specifically resulting from flooding. This type of insurance is designed to cover damages to property and belongings that arise when water inundates areas that are typically dry, which can include homes, businesses, and personal property. Since standard homeowners' insurance policies often exclude flood damage, flood insurance is crucial for individuals and businesses located in flood-prone areas.

While options like coverage for property damage due to fire, insurance for natural disasters in general, and general liability coverage for businesses touch on important types of insurance, they do not specifically address the unique risks associated with flooding. Flood insurance is tailored to respond to the specific hazards and financial consequences caused by flood events, making it distinct from other forms of property or liability insurance.