A standard homeowner’s insurance policy does not cover flooding.
In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves from a flood. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.
How to Purchase Flood Insurance?
Flood insurance is sold through local insurance agents. Homeowners and business owners should contact their local insurance company to purchase flood insurance coverage. Building owners can insure both the structure and contents – these are sold separately so be sure to ask about both. Renters can purchase insurance to protect their contents. Mobile homeowners can be insured if located on a permanent foundation and anchored to resist movement during a flood. To ensure you are receiving the best rate possible, be sure to provide your insurance agent a copy of your elevation certificate.
Visit the National Flood Insurance Program website to obtain detailed information about flood insurance for property owners, claims adjusters, insurance professionals, lenders, state and local officials, and surveyors. For more information, contact your insurance agent or company, or call the National Flood Insurance Program's toll-free number at 1-888-379-9531 (TDD# 1-800-427-5593). Or email FloodSmart@dhs.gov.
Who Needs Flood Insurance?
Flood insurance is required by federal regulations for structures either partially or completely located in a Special Flood Hazard Area and with a mortgage backed by federal programs such as Fannie Mae and Freddie Mac. Having flood insurance is necessary to maintain eligibility for any federal or federally related financial reconstruction or acquisition assistance.
Should I purchase Flood Insurance?
Even if you are not required to purchase flood insurance, you still may want to consider purchasing a flood insurance policy - each year between 25 percent to 30 percent of flood insurance claims occur outside special flood hazard areas. Policy's purchased for homes outside of a Special Flood Hazard Area are called Preferred Risk Policies (PRPs) and are less expensive than policies for homes in Special Flood Hazard Areas due to their deceased risk of flooding.
Flood Insurance Reform
In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act. In 2014, Congress passed the Homeowner Flood Insurance Affordability Act. These Acts call on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the NFIP is run. Some of these changes have already occurred, while others will be implemented in the coming months. Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders.
The changes will mean premium rate increases for some, but not all, policyholders over time. If you have questions about how these bills will affect your flood insurance rate, please contact your insurance agent.