Floods are the second most common natural disaster in the United States. One in three American households is at risk of flooding. But many homeowners don’t have the proper coverage in place. If you live in a flood zone, you should definitely have a flood insurance policy. Flood insurance is mandatory if you have a federally backed mortgage and you live in a flood zone. Flooding can happen anytime, and, in many cases, even small streams have the potential to overflow and cause damage.