If a hurricane were to cause your home to flood, would you be covered? Far too many Americans aren't aware that flood damage isn't typically covered by homeowners insurance.

In this Industry Focus: Financials clip, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss what homeowners need to know about hurricanes and insurance.

A full transcript follows the video.

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This video was recorded on Sept. 17, 2018.

Jason Moser: I want to take a step back here a little bit. Florence has certainly taken a toll on the Carolinas and beyond. Our thoughts are with everyone in the affected that regions as they deal with the aftermath, and recovery. Now, a big part of this recovery is going to depend on insurers. Matt, that's where I thought we would kick off our conversation today, because there's a few different ways to look at this. We can look at this from the perspective of homeowners, but we're also an investing show here, so we want to look at things through the investing angle, as well.

Let's take a step back here, first and foremost, let's look at the bigger picture. You and I both have some experience weathering these types of storms. I went through Hugo in Charleston in 1989. I know you spent some time down in the Florida Keys. What are some of the things that homeowners can do to protect themselves from storms like these?

Matt Frankel: Insurance, as you mentioned, is a really big one. A lot of homeowners don't realize, especially if they're not in an obvious flood zone, that floods are not covered by most homeowners' insurance policies. If, say, a creek in your backyard overflows and causes damage to your home, you might be on your own for those damages. So, in storms like this, especially if you're a little inland and aren't really thinking in terms of flooding, you may want to look into flood insurance anyway, because this is not covered by most major insurance plans. FEMA has [...] zones, and if you're in what's called a V or an A flood zone, you're pretty much required to purchase flood insurance if you have a mortgage on your home. If you're in any other flood zone, the probability of a flood is considered to be once in 500 years or less, so you're not required to purchase flood insurance. That doesn't make it a bad idea. And in fact, in many places that aren't considered flood prone, it's pretty cheap to do so. So, flood insurance is by far probably the best way homeowners can protect themselves.

Don't skimp on contents coverage is my other big insurance tip here. A lot of people will purchase flood coverage on their house only, and only put $5,000 or $10,000 for contents coverage. Well, contents coverage is everything that's not a physical part of your house. [...] if there's any remote possibility that you could flood, if a storm could come inland and flood your home, flood insurance is a must-have. Be sure, when you purchase flood insurance, that you're getting adequate contents coverage, not just on your home itself. You might be surprised how much it would cost to replace all of your stuff.

Moser: Yeah, I think those are all really good points there. Most people today, they would think, "Well, I'm not in a flood zone. Therefore, I don't need flood insurance." But when you take a step back, and you recognize the fact that if the wind blows your roof off, and then you get an inch full of rain in your house, I mean, chances are, insurance companies are going to consider that flood damage, and even potentially wind damage. Wind damage isn't always covered on the policy, either. It is a good reminder, always, to go check back your policy. Make sure you understand the coverages that you have. Speak with your insurance agent about adding particular coverages if you don't have them.

I know one of the things I experienced, I've worked at Travelers Insurance for a spell. It was interesting to me to see how many people didn't have comprehensive coverage on their car. Comprehensive is something that you're going to need in case of a storm like this. Your typical collision and liability aren't going to cover those damages if a tree falls on that car and renders it unusable. One thing I always make sure I check back is understanding the comprehensive coverage we have on our autos at our house. I think the flood insurance, as well, is something that's really worth noting.

Now, I don't know about you, but when we went through Hugo in 1989, we ended up staying at our house. We were right there in the middle of it in Mount Pleasant. The storm came right through us. We walked outside during the eye, we went back inside. We weren't in the middle of a flood-prone area, but there were pine trees all around us. We caught a few trees on the house. And while we were there to help mitigate some of the damages that were there, I can't help but feel like maybe we would have been better off taking off and leaving town. But this was 1989, so information didn't travel quite as quickly as it does today.

But Matt, we see a lot of these counties, these states, that throw up these mandatory evacuations. What's your take on that? I mean, is it worth sticking around? If you're looking at a house that's potentially going to be flooded, there's only so much you can do, right?

Frankel: Like you mentioned, I used to live in the Florida Keys. I lived there for about five years. They're no stranger to hurricanes. I don't know if I can proudly say, but I never evacuated for a hurricane, and we had a few mandatory evacuations while I was there. My wife is considered essential personnel, she works at a hospital, so we had a good reason for staying. But my general feeling is, if you're told to leave, get out, especially if you have young children. My wife, like I said, is essential personnel. If the storm was forecast to be a category three or higher, they made her get out anyway. They shut down [...], seems to be that essential services are still operating, then it's kind of a tossup. Like I said, if you have kids, get out of there. But, my general feeling is, if you're told to leave and it looks like you won't have access to central services, it's not just about the flood damage, it's not just about the wind damage. It's, what if you need help with anything? That's my feeling when it comes to whether you should get out or not.

Moser: Yeah. I imagine, if you feel like you're well-insured, it probably makes that decision a little bit easier to go ahead and take off, knowing that you really are fully covered. Again, a good reminder, obviously we can't do anything about it right now, but these storms are a matter of when and not if. It's always a good idea to take a look at your coverages there and make sure you've got everything in order.