Tennessee Business and Law Practice Exam

The type of insurance that specifically provides coverage for damages caused by floods is flood insurance. This type of insurance is tailored to protect property owners from flooding, which is not typically covered under standard homeowners’ insurance policies. Flood insurance can cover damage to homes and personal property caused by inundation from rising waters, ensuring that policyholders have financial protection in the event of such a natural disaster.

While all-risk insurance covers a wide range of incidents, it may not include certain specific risks like floods unless explicitly stated. Named-peril insurance, on the other hand, only covers risks that are specifically listed in the policy, which can vary widely. Comprehensive insurance can often refer to auto insurance that covers a variety of damages but is not typically used to describe flood coverage in property insurance. Thus, flood insurance is the correct and specific solution for damages arising directly from flooding.