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For many homeowners, flood insurance coverage may seem optional. For example, if your lender doesn’t require you to carry flood insurance or if you no longer have a mortgage, flood insurance may seem “unnecessary”. However, the need for flood insurance is ever-present, and as hurricane season peaks across the U.S. homeowners should be mindful of what type and how much coverage they have.

The Insurance Information Institute reported last week that the urgency of this matter is even greater this year as the National Flood Insurance Program (NFIP) is set to expire and will only be selling new residential and commercial policies until Thursday September 30, 2010. Peak hurricane season lasts through November 30th-  although a hurricane could hit the U.S. at any time. If the NFIP’s flood program doesn’t renew on September 30th- homeowners may be unable to buy flood insurance at all until further notice.

While wind and hail coverage under a standard homeowners insurance policy may cover damages caused by hurricane force winds and driving hail- the rising flood waters typically seen during any hurricane can cause a devestating amount of damage to residential and commercial buildings. The damage caused by these flood waters is not covered under a standard homeowners policy and only provided under a flood insurance policy.

This year also marks the 5 year anniversary of Hurricane Katrina which is a grim reminder for many U.S. residents in the southern coastal states that flood insurance and hurricane awareness are not to be taken lightly. Yet even after Hurricane Katrina took around 1400 lives and caused about $16 billion worth of damage from flooding, only about 1 in 10 homeowners in the U.S. have a flood insurance policy.  (For more info see the III’s white paper, Hurricane Katrina: The Five Year Anniversary).

Your best bet is to include your understanding of your flood insurance coverage in your Hurricane Preparedness plan. Ask your homeowners insurance agent about the type of coverage you have in the event of a hurricane and whether or not it is enough.  Make any changes to your policy now- before disaster strikes. And remember to re-evaluate your coverage next year as well.

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