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The primary purpose of flood insurance is to provide coverage for damage caused by flooding. Flood insurance specifically addresses the risks associated with water damage that arises from natural flooding events, such as heavy rainfall, storms, or melting snow, which can lead to overflow from rivers and drainage systems. Unlike standard homeowners' insurance policies, which typically exclude flood-related damage, flood insurance is designed specifically to cover losses resulting from floods.

This specialized coverage is essential for homeowners and businesses located in flood-prone areas, as it helps protect their financial interests and supports their recovery after flood events. Understanding the importance of flood insurance is critical, especially since many areas require it for properties situated in designated flood zones. While other forms of insurance may cover different types of risks like theft, fire, or earthquakes, flood insurance is distinctly focused on the unique hazards posed by rising water levels.