Considering Coverage- FAQ's Sheet
Doesn't my homeowners insurance policy cover flooding?
No. Flood damage is not covered by your homeowners insurance 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 percent of all
weather emergencies in the United States are declared.
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.
Find out if your community participates in the NFIP and the kinds of
NFIP resources available
in your community.
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.
I live in a low-risk flood zone. Do I really need flood insurance?
It's a good idea to buy flood insurance even if you live in a low- or
moderate-risk area. Almost 25 percent of all flood insurance claims come from
areas with minimal flood risk. You may qualify for the
Preferred Risk Policy (a lower-cost flood insurance policy) that
provides contents coverage for as little as $39 per year and building plus
contents coverage for just over $121 a year.
Why do I need flood insurance, even though my community has never been
flooded?
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 high-risk flood areas have a significant chance (26
percent) of suffering flood damage during the term of a 30-year mortgage while
only a 9 percent chance of loss from fires. A home mapped in a high-risk area
is three times more likely to suffer damage from a flood than a fire in the
lifetime of a typical mortgage!
For these reasons, flood insurance is required as a condition of receiving
federal or federally-backed financial assistance.
Why does my mortgage lender require me to buy flood insurance?
The purchase of flood insurance is mandatory for all federal or
federally-backed financial assistance for the acquisition and/or construction
of buildings in high-risk flood areas (Special Flood Hazard Areas or SFHAs).
Flood insurance must be maintained during the term of the loan and is required
for the lesser of the maximum amount of available NFIP coverage or the
outstanding principal balance of the loan (less the land value).
If the property is not in a high-risk area, but instead in a low- to
moderate-risk area, the law does not require flood insurance; however, it is
recommended since historically about one-in-four flood claims come from these
low- to moderate-risk areas. 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. If you do not purchase flood
insurance, the lender will force place it, which could be at a much higher
rate.
Is there a low-cost policy for homes in low-to moderate-risk areas?
Yes.
The
Preferred Risk Policy is available in low- to moderate-risk areas for
as little as $121 per year.
I'm not in a high-risk area, but I'd like complete flood coverage. Is this
possible?
Yes! You are eligible to purchase a flood policy with the same coverage you
would receive if you lived in a high-risk area. That is of course, as long as
your community participates in the NFIP. And, you may qualify for the
Preferred Risk Policy (a low-cost flood insurance policy) that provides
contents coverage for as little as $39 per year and building and contents
coverage for as little as $121 per year.
After my home was damaged in a flood, I received federal disaster
assistance. Do I need to purchase flood insurance now?
Yes. If you live in a high-risk area and have received disaster assistance from
the Small Business Administration (SBA) after a flood, you are required to
purchase and maintain flood insurance coverage until the loan on your property
is paid off.
If you don't get flood insurance and another flood damages your property, you
will be denied federal disaster assistance. If you sell the property, you are
required to notify the buyer of the need to purchase and maintain flood
insurance.
Who do I contact if I want to purchase a flood insurance policy?
The National Flood Insurance Program has an arrangement with private insurance
companies to sell and service flood insurance policies.
A list of private insurance companies that sell and service NFIP flood
insurance policies is available to you.
You may also contact your insurance agent or company to find out more about
federal flood insurance or
find an agent serving your area.
What if I want to purchase more insurance than the NFIP offers?
Many private insurance companies offer Excess Flood Protection, which provides
higher limits of coverage than the NFIP, in the event of catastrophic loss by
flooding. For more information, contact your insurance agent or company or
find an agent serving your area on FloodSmart.gov.