Our staff wants to help you simplify flood insurance. Below you will find frequently asked questions on everything from coverage to cost with the answers you need. More questions? Contact our staff at 888.754.8299.
Coverage Questions
Your homeowners insurance will not cover your home or belongings in the event of a flood. If you are in a situation where your home suffers from flood damage, you will need flood insurance to pay for that damage. Those who live in a high-risk zone will be required by their mortgage lender to obtain a flood insurance policy. If you are not in a high-risk flood zone, it may still be a good idea to have it. People outside of high-risk areas file nearly 25% of National Flood Insurance Program (NFIP) claims and receive one-third of disaster assistance for flooding.
You can buy coverage for the structure of your home and your personal property, or just the structure. There are also restrictions to coverage for systems located in the basement. For the structure you can obtain up to $250,000 coverage and for contents you can obtain up to $100,000 coverage through the National Flood Insurance Program (NFIP). For additional coverage, you will need to purchase an excess flood insurance policy.
- The insured building and foundation
- Electrical and plumbing systems
- Central air-conditioning equipment, furnaces, water heaters
- Refrigerators, cooking stoves, and built-in appliances (such as dishwashers)
- Permanently installed carpeting that is installed over an unfinished floor
- Permanently installed paneling, wallboard, bookcase and cabinets
- Window blinds
- A detached garage (up to 10% of the Building Coverage)
- Other detached buildings (such a gazebo or shed) are not covered. They would need a separate Building Property Policy. Also, if you need more than 10% of the building coverage, you would need to purchase a separate policy.
- Debris Removal
- Personal belongings such as clothing, furniture and electronic equipment
- Curtains
- Portable and window air conditioners
- Portable microwave ovens and portable dishwashers
- Carpets not included in building coverage (not permanently installed, or permanently installed over a finished floor
- Clothes washers and dryers
- Food freezers and the food in them
- Certain valuable items such as artwork and furs (up to $25,000)
- Damage caused by moisture, mildew or mold that could have been avoided by the property owner
- Currency, precious metals and valuables such as stock certificates
- Property and belongings outside of a building such as trees, wells, septic systems, walkways, decks, patios, fences, seawalls, hot tubs and swimming pools
- Living expenses such as temporary housing
- Financial losses caused by business interruption or loss of use of insured property
- Most self-propelled vehicles such as cars and their parts (this would be covered under the comprehensive portion of an auto policy)
The mortgage company only requires building coverage. A flood insurance policy insures your home for replacement cost if:
- The building is a single family dwelling
- The building is your principal residence at the time of loss (you live there at least 80% of the time)
- Your building coverage is at least 80% of the full replacement cost of the building or is the maximum available offered under the NFIP
If you do not meet these requirements, your home is insured for actual cash value (ACV). ACV is the replacement cost value at the time of loss, which is less the value of its physical depreciation. The replacement cost of your home may be higher than the amount of building coverage the mortgage company requires you to carry. Your primary homeowner’s policy should insure your dwelling for the replacement cost. You can use this number to determine how much flood insurance you should have for the building.
Coverage limitations apply to basements, which can be defined as any area of the building, including a sunken room or sunken portion of a room, having its floor below ground level (on all sides). The same can be said of enclosed areas (lower floor) even when a building is constructed with what is sometimes called a walkout. When a building is elevated on foundation walls, coverage limitations apply to the crawl space below as well. Ask an agent about the specifics for what is and isn’t covered in your finished or unfinished basement. There is limited coverage regardless of zone or the date of construction.
Your personal property is covered on an actual cash value basis. To determine how much you need, a home inventory of items in your home that would be covered can help you figure out the actual cash value of your contents.
Deductible options are $1,000, $2,000, $3,000, $4,000 or $5,000. Choosing a higher deductible will help decrease the annual premium. If you are not eligible for a Preferred Risk Policy, you can choose a different deductible for Building coverage and Personal Property coverage.
In 1994 the National Flood Insurance Reform Act (NFIRA) lengthened the waiting period required before an NFIP policy can go into effect from 5 to 30 days. Congress did this to prevent the purchase of flood insurance just before a flood hits. Unless an exception applies, as described in the next question, a 30-day waiting period is required before NFIP flood insurance goes into effect.
There are some exceptions to the typical 30 day waiting period. Below are the exceptions:
- If flood insurance is being purchased in connection with the making, increasing, extending or renewing of your loan.
- If a building has been newly designated in the SFHA and flood insurance is being purchased within the 13-month period following a map revision.
- If flood insurance is required as a result of a lender determining that a loan that does not have flood insurance coverage should be protected by flood insurance.
- If an additional amount of insurance is selected as an option on the renewal bill.
- If a property is affected by flooding on burned Federal land that is a result of, or is exacerbated by, post-wildfire conditions when the policy is purchased within 60 days of the fire containment date.
Flood Zone Questions
A flood could happen to almost anyone, not just those in a high risk flood zone. The NFIP’s Preferred Risk Policy, available for about $400 a year for full coverage, is designed for residential properties located in low-to-moderate flood risk zones. More than 20 percent of claims are made from areas outside of mapped high-risk flood zones. Flooding can be caused by snow and ice melt, dam breach, extremely heavy rain fall or a hurricane. These are things that could happen to anyone. You may want to keep in mind that flood zone maps change and you are better off obtaining coverage before you are moved to a flood zone.
You can call your town. They will have the maps and sometimes they have elevation certificates on file as well. You can also call your insurance agent, or ask the mortgage company. Lastly, you could visit FEMA’s website and find your flood zone.
Before a community is eligible for disaster assistance, it must receive a federal disaster declaration by the President. Declarations occur in less than 50 percent of flooding incidents. The most typical form of disaster assistance is a loan that must be repaid with interest. If federal disaster assistance is available, not everyone is eligible and the amount may be less than needed to complete repairs and replace property.
Required coverage typically occurs when you have a loan for your home and the mortgage company requires the insurance because you’re in a mapped high-risk flood zone. Optional coverage is for those not in a high-risk area. Due to less risk, they also tend to be less expensive. This is something to keep in mind when deciding whether or not optional flood insurance coverage is for you.
Severe repetitive loss property is covered under a contract for flood insurance made available under the NFIP and has incurred flood related damage:
- For which 4 or more separate claims payments have been made under flood insurance coverage with the amount of each claim exceeding $5,000 and with the cumulative amount of such claims exceeding $20,000 or
- For which at least 2 separate claims payments have been made under such coverage, with the cumulative amount of such claims exceeding the market value of the insured structure
Yes, you can ask for the property to be re-mapped by hiring an engineer and obtaining an elevation certificate.
You can contact your local flood plan officials or the planning and zoning office to see if an Elevation Certificate already exists for your property. If one is not available, you can have one prepared and certified by a Licensed Land Surveyor, Registered Professional Engineer, or Registered Architect who is authorized by State or local law to certify elevation information. Community officials who are authorized by local law or ordinance to provide flood plain management information may also sign the certificate.
Yes, and people outside of high-risk areas file nearly 25% of NFIP claims and receive one-third of disaster assistance for flooding. Flood insurance is available to all locations in communities that are participating in the National Flood Insurance Program.
A Preferred Risk Policy is a low-cost flood insurance policy available for residential and non-residential buildings located in moderate to low risk areas (B, C, and X zones). The property cannot be in a community that is in the Emergency Program. If one of the following conditions exists within any 10 year period, regardless of any change(s) in ownership, then the building is not eligible for the PRP:
- 2 flood insurance claim payments, each more than $1000; or
- 3 or more flood insurance claim payments, regardless of amount; or
- 2 Federal flood disaster relief payments (including loans and grants), each more than $1000; or
- 3 Federal flood disaster relief payments (including loans and grants), regardless of amount; or
- 1 flood insurance claim payment and 1 Federal flood disaster relief payment (including loans and grants), each more than $1000.
Preferred Risk policies are for those in low to moderate flood zones. They are not an option for those in a high-risk zone. Those in high-risk zones will have to obtain a Standard Flood Insurance policy. Preferred Risk Policies provide you with flood insurance protection that is the same as a standard policy, but at significant savings.
Cost Questions
Flood insurance policies can range from a couple hundred dollars to a couple thousand dollars, depending on which flood zone you are in. A number of factors are considered when determining your flood insurance premium, including the amount and type of coverage, location and flood zone, and the design and age of your structure. For homes in a high-risk area, the elevation of the building can also be a factor. Be sure to ask your agent about discounts available to you.
You could opt for only the required coverage (if you have a loan) or you could up your deductible. However, you will want to keep in mind that when you lower your deductible, you are increasing the amount you are willing to pay out of pocket for damages.
You could also do the following:
- Relocate the machinery and equipment that services your building (i.e., electrical, heating, ventilation, plumbing and air conditioning equipment) to an area that is above the base flood elevation.
- Make sure your home has the proper amount of flood opening.
- If you are in a high-risk flood zone, having a basement or sub-grade crawlspace can pay an extra 15-20%. When building, you can save that cost by back‑ filling any excavated areas within the foundation. It can also be done at a later date by using pea-gravel or other suitable material to raise the interior crawlspace floor elevation to the same height or higher than the exterior ‑ finished grade.
- Elevate your home above the base flood elevation. You can save hundreds of dollars for every foot the elevated floor is above the community’s established based flood elevation.
- Relocate your home to an area on your property that has its natural grade above the base flood elevation.
The rates are set by FEMA and are the same regardless of where you purchase the insurance. Every company will provide the same price for your flood zone. However, working with a flood expert can help you evaluate coverage options that could affect your rate.
If your property has been changed from a low-risk to high risk during remapping, you can save money with the Grandfather Rule. This is available to property owners who:
- Have flood insurance policies in effect when the new flood maps become effective and then maintain continuous coverage or
- Have built in compliance with the FIRM in effect at the time of construction
Keep in mind that timing is key. The last chance to qualify for grandfathering is to buy or renew a policy before the new FIRM becomes effective. The grandfathered zone can be transferred to the new owner if the building is sold.
Flood Insurance for Business Questions
Yes, you can buy coverage for your property and the structure, or just the structure. It is best to purchase coverage for both to better protect your business, your business property, and your inventory.
You have the ability to purchase contents coverage for all of your business contents.
Not necessarily. It is best to check with your town or look your address up on the flood map found here.
This will depend on the amount of property you have the replacement cost of the structure and inventory of your business. An agent can help walk you through the options. Keep in mind that what your mortgage company will require is only the minimum coverage to pay off your loan. Ask your agent about how much coverage you need to be able to re-build and replace your business if a flood occurs.
Business coverage is offered for up to $500,000 for the building and $500,000 for contents. It is best to have an accurate and up to date estimate for the value of your building and value of your contents when speaking with an agent.
Flood Insurance for Renters & Condo Owners Questions
Yes, you can get coverage for your personal contents within your apartment.
Yes, you would need coverage for the structure, and even if you’re not in a high-risk zone it is smart to have.
Renters do not obtain coverage for the structure of the building; they only obtain coverage for personal property. Homeowners have the option of obtaining coverage for both the structure of the building and personal contents coverage or just the structure.
You will need to cover 100% of your personal belongings. As far as building coverage goes, you can start by seeing what part of the condo you are responsible as defined in the condo bylaws and see how much coverage, if any, the condo association carries. You will want to make sure that you have enough coverage with your own flood insurance policy to cover the structure and contents.
If you have a loan and you’re in a flood zone you would have to buy coverage like any other homeowner. You will want to make sure that you have the coverage you need for the structure of the building. If renters own all the contents, advise them to obtain coverage on their own for their contents.
Laws & Regulations Questions
This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act. The major changes are:
- Lowers the recent rate increases on some policies, prevents some future rate increases and implements a surcharge on all policies. It also repeals some rate changes that have already gone into effect and will provide these policyholders with a refund.
- The law mandates that FEMA develop an installment plan for non-escrowed flood insurance premiums.
- Maximum deductibles are increased.
Congress created the National Flood Insurance Program in 1968 to help provide property owners with a way to financially protect themselves from flooding and the rising costs of flood insurance.
This required the NFIP to raise insurance rates on some older properties in high-risk areas to reflect the true flood risk. It requires to changes to all the major components of the program, including flood insurance, flood hazard mapping, grants, and the management of floodplains. It also extended the National Flood Insurance Program for 5 years.
FEMA went through and remapped the zones. Re-mapping of the flood zones occurs when new maps are issued. During this time, your flood risk may become higher or lower. If you were not previously in a zone, it could have changed requiring you to have flood insurance for the first time.
You can submit for it to be remapped again, but this may take a while and you would most likely still have to purchase the coverage in the meantime if you had a loan that was requiring it.
Need More Answers? Learn More About the Experts
The National Flood Insurance Program is administered by FEMA. They are the ones that are in charge of the flood zone mapping as well.
You should look to an agent that can answer your questions throughout the process. The process of obtaining flood insurance can be tricky, but with the right agent as your ally it can simplify things. Also keep in mind that it would be smart to have your home and flood policies together so that your agent can review to see how much coverage you need.
You should ask the town or neighbors for advice, as they may have either already been through the process or they are currently going through the process. There may be a trusted engineer in your area that has experience specifically with the process.
All rates and coverage options are the same regardless of where you purchase the coverage. When you are working with an agent you can trust, you do not have to worry about the carrier.