Flood – Frequently Asked Questions

Considering Purchasing a Policy?

Some of your Questions:

Q. Doesn't my homeowner’s insurance policy cover flooding?

No. Flood damage is not typically covered by a homeowner’s insurance policy.

Q. If my home is flooded, won't federal disaster assistance pay for my damages?

Not necessarily. Federal disaster assistance typically comes in the form of a low interest loan 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 must be repaid along with any existing mortgage.

Q. Am I eligible for flood insurance?

You must live in a community that participates in the National Flood Insurance Program (NFIP) to qualify for National Flood Insurance.

Q. Can I get flood insurance if I'm renting a property?

If you live in a community that participates in the NFIP, you can get flood insurance to cover the contents of your home or business.

Q. I live in a low-risk flood zone. Do I really need flood insurance?

Even though flood insurance isn't federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file over 20-percent of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding. When it's available, disaster assistance is typically a loan you must repay with interest. A Preferred Risk Policy provides both building and contents coverage for properties in moderate- to low-risk areas for one low-price.

Q. Why do I need flood insurance, even though my community has never been flooded?

Flooding occurs in moderate-to-low risk areas as well as in high-risk areas. Poor drainage systems, rapid accumulation of rainfall, snowmelt, and broken water mains can all result in flood. Properties on a hillside can be damaged by mudflow, a covered peril under the Standard Flood Insurance Policy. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage. For these reasons, flood insurance is required by law for buildings in high-risk flood areas as a condition of receiving a mortgage from a federally regulated or insured lender.

Q. Why does my mortgage lender require me to buy flood insurance?

Under federal law, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas (Special Flood Hazard Areas or SFHAs).

The amount of flood insurance coverage required by the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994, is the lesser of the following:

  1. The maximum amount of NFIP coverage available for the particular property type,
  2. The outstanding principal balance of the loan, or
  3. The insurable value of the structure.

If the property is not in a high-risk area, but instead in a moderate-to-low risk area, federal law does not require flood insurance; however, a lender can still require it. In fact, over 20-percent of all flood insurance claims come from areas outside of mapped high-risk flood zones. Note that if during the life of the loan the maps are revised and the property is now in the high-risk area, your lender will notify you that you must purchase flood insurance.

Q. What are flood zones?

Flood zones are land areas identified by the Federal Emergency Management Agency (FEMA). Each flood zone describes that land area in terms of its risk of flooding. Everyone lives in a flood zone, just a question of whether you live in a low, moderate, or high risk area.

Q. Why do I need flood insurance if I live on a hill and will never get flooded?

Floods can occur in any area, although to varying degrees. If you live on a hill or in an area that has never been flooded, your risk may be significantly reduced, but it is not eliminated.

Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed protective devices such as levees and dams, as well as by tropical storms and hurricanes. Please make an informed decision about the flood risks you face before deciding not to purchase flood insurance. Talk to your agent for additional details as you may qualify for a Preferred Risk Policy (a lower-cost flood insurance policy).

Q. How much flood insurance coverage is available?

Flood coverage limits for a standard flood policy are:

Structure Type Building Coverage Contents Coverage
1-4 Family Structures Up To $250,000 Up To $100,000
Other Residential Structures Up To $500,000 Up To $100,000
Business Structures / Business Contents Up To $500,000 Up To $500,000
Renters NA Up To $100,000

Q. What is the preferred risk policy (PRP)?

The Preferred Risk Policy offers multiple coverage combinations for both buildings and contents (or contents-only, for renters) that are located in moderate-to-low risk areas (B, C, and X Zones). Preferred Risk Policies are available for residential or non-residential buildings also located in these zones, and that meet eligibility requirements based on the building’s entire flood loss history.

Q. 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: furnace, water heaters, circuit breakers, etc.). 

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 that must be purchased in addition to building 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. Flood insurance does not cover basement improvements, such as finished walls, floors, ceilings or personal belongings that may be kept in a basement. For a complete list of what’s covered,  Click Here

Q. Does flood insurance cover flood damage caused by hurricanes, rivers, or tidal waters?

Yes, providing that, if confined to your property, the flood water covers at least two acres. A general condition of flood also exists if two properties are affected, one of which is yours.

Q. 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.

Flood insurance covers overflow of inland or tidal waters and unusual and rapid accumulation or runoff of surface waters from any source. However, the flood must be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is yours). Although flood insurance specifically excludes wind and hail damage, the good news is that most homeowners insurance provides such coverage.