Flood Insurance
This insurance is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods.
Flood Insurance FAQ
Doesn't my home insurance policy cover flooding?
No. Flood damage is not covered by your homeowners policy.
If my home is flooded, won't federal disaster assistance pay for my damages?
No. Federal disaster assistance offers loans to help cover flood damage, not compensation for your losses. Even then, those loans are only available if the President formally declares a disaster, and less than 10% of all weather emergencies in the United States are declared disasters.
Am I eligible for flood insurance?
Most likely yes, but you must live in a community that participates in the National Flood Insurance Program (NFIP) to qualify for federal flood insurance.
Why do I need flood insurance, even though my community has never been flooded?
The NFIP determines Special Flood Hazard Areas (SFHAs) based on many factors, not just on past flooding. The fact that a flood hasn't occurred within recorded history doesn't mean one hasn't happened in the past or that one won't happen soon. Structures located in the floodplain have a significant chance (26%) of suffering flood damage during the term of a 30-year mortgage. For these reasons, flood insurance is required as a condition of receiving Federal or federally-backed financial assistance.
Is there a low-cost policy for homes in low- to moderate-risk areas?
Yes. The Preferred Risk Policy is available for just over $100 a year.
How much insurance should I have?
A primary residence should be insured for at least 80% of its Replacement Cost Value (RCV) or the maximum amount available.
What types of polices are there?
Policies are available in three forms: Dwelling (most homes), General Property (apartments and businesses), and Residential Condominium Building Association (condominiums). Renters may purchase coverage under the Dwelling policy.
How much flood insurance coverage is available?
How is my flood insurance premium calculated?
A number of factors are considered when determining your flood insurance premium. These factors include: the amount and type of coverage being purchased, the location and flood zone, and the design and age of your structure. For homes in Special Flood Hazard Areas (SFHAs), the elevation of the building in relation to the base flood elevation is also required.
Can I get a discount on my flood insurance premium?
It's possible that you qualify for a discount based on your community's participation and status in the Community Rating System program.
How can I pay for my flood insurance?
You can pay your insurance premium with a credit card (Visa or MasterCard) or with cash, check or money order. Your premium may be paid through an escrow account established by your mortgage lender, at your lender's discretion.
In fact, if your lender requires you to buy flood insurance and escrows for other types of insurance or taxes, he/she is required to also escrow flood insurance premium payments. Ask your insurance agent or lender for details.
Will there be a waiting period for my policy to take effect?
Most likely. There is generally a 30-day waiting period from the time an insurance policy is purchased to when it actually goes into effect.
What is the policy term for flood insurance?
One year.
Does a deductible apply to my coverage?
A deductible is applied separately to a property and its contents, although both may be damaged in the same flood. Higher deductibles are available; please note that choosing a higher deductible will reduce your policy premium, but must be approved by your mortgage lender.
How many structures (and their contents) may be insured on each policy?
Only one building and its contents can be insured on each policy.
Is there a 'grace period' after a policy has expired?
All policies expire at 12:01 a.m. on the last day of the effective term, but you remain covered for 30 days after the expiration of the policy. Claims for losses that occur in this grace period will be honored, provided that the full renewal premium is paid by the end of the 30-day period.
Will damage-preventing measures I've taken in my home be reimbursed by my flood insurance policy?
Some will be. When your insured home is in imminent danger of being flooded, you may receive up to a $1,000 reimbursement for your damage-preventing expenses. Things like renting storage space to protect your belongings, buying sandbags and lumber to make a barricade, and renting pumps are all things that qualify for reimbursement. No deductible is applied to this coverage.
Is flood damage from wind-driven rain covered?
No. When rain enters through a wind-damaged window or door, or comes through a hole in a wall or roof, the NFIP considers the resulting puddles and damage to be windstorm-related, not flood-related.
Does the NFIP cover flood damage caused by hurricanes, rivers or tidal waters?
Yes, providing that at least two adjacent properties in the area (or two acres) are flooded.
Are losses from land subsidence, sewer backup or water seepage covered?
Losses from land subsidence (a gradual or sudden sinking of land) is covered if the damage is a direct result of flooding. You're covered if your property is near a lake or similar body of water, and waves or currents from the lake cause your property's land to sink.
Damage caused by sewer or drain backup, or overflows from a sump pump or related equipment are covered if the event is a direct result of flooding.
Seepage or leaks in your home are not covered.
What is covered in my basement?
Flood insurance covers your home's foundation elements and equipment that's necessary to support the structure (for example a furnace, water heaters, circuit breakers).
It's important to note that some items in your basement are covered under building coverage (like a furnace, hot water heater and circuit breaker), and others are covered under contents coverage (for example, your washer and dryer, or your freezer and the food in it).
The NFIP encourages people to purchase both building and contents coverage for the most complete protection. Flood insurance does not cover basement improvements, such as finished walls, floors, ceilings, or personal belongings that may be kept in a basement. See the Standard Flood Insurance Policy (SFIP) Forms for a complete list of what's covered.
What is Increased Cost of Compliance (ICC) coverage?
If a flood damages your property, you may be required by law to bring your home up to community and/or state safety standards. If you have NFIP insurance, ICC coverage is provided to cover up to $30,000 of the cost to elevate, floodproof, demolish, or relocate your property. ICC coverage is in addition to the coverage you receive to repair flood damages.