Yes, flood insurance will cover the flood damage but it will only cover the damaged areas. For instance, if you have 2 feet of water in the home the insurance will only cover the repair of the damage up to that 2 foot line. So if you decide to repair the entire wall the insurance is only going to pay for the bottom 2 feet. Unless, of course, the 2 feet of water is the proximate cause of other damages such as collapse.
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