Purchasing Flood Insurance

by Paul Konrardy

One of the most important things that you can do to protect your home and family before a flood is to purchase a flood insurance policy – even if you don’t live in a flood-prone area. Flood insurance provides year-round financial protection and improves your ability to quickly recover when severe storms strike and cause unexpected flooding.

WHN TIP – 30-Day Wait: Most flood insurance policies take 30 days to go into effect. If you live in Florida or along the Gulf Coast, consider purchasing your policy before the hurricane season, which officially begins in March.

About Flood Insurance

In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods.

Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes federally backed flood insurance available to homeowners, renters, and business owners in these communities.

To find out if your community participates in the NFIP, click here. You can also request a Flood Hazard Determination Review from FEMA. You can also get more information or additional assistance by calling a Map Specialist toll free at 1-877-FEMA MAP (1-877-336-2627).

In order to obtain secured financing to buy, build, or improve structures in Special Flood Hazard Areas (SFHAs), you will be required by law to purchase flood insurance. Lending institutions that are federally regulated or federally insured must determine if the structure is located in a special flood hazard area and must provide written notice requiring flood insurance.

Visit the NFIP site for more flood insurance information.

Common Flood Insurance Questions

  1. Why do I need flood insurance?
    • Insurance can protect your home and your belongings in case of flood damage. Floods are the most common natural disaster, with 80 percent of all presidential-declared disasters involving floods.
    • All areas are susceptible to flooding, although to varying degrees, In fact, 25% of all flood claims occur in the low-to-moderate risk areas. Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed protective devices such as levees and dams, and tropical storms and hurricanes.
    • Even if a disaster is not declared by the President, flood insurance claims are paid. When you carry a flood insurance policy and file a flood insurance claim, usually you get a partial payment.
  2. Is flood insurance part of my existing policy?
    • Flood insurance is not part of most homeowners’, mobile home or rental insurance policies. You will most likely need to purchase separate coverage, which also has a 30-day waiting period before it goes into effect.
    • Check with your insurance agent to determine if you need flood insurance. Also, check your policy for “loss of use” coverage.
    • Any walled and roofed building in an NFIP-participating community is eligible, whether or not the building is located in a floodplain. Manufactured homes installed on a permanent site and anchored also can be insured.
  3. What types of coverage are available?
    • Structural coverage on walls, floors, insulation, furnace, and items permanently attached to the structure
    • Contents coverage for such items as furniture, appliances, and other household goods. This coverage must be purchased separately from structural coverage. Homeowners, business owners, and renters can all purchase flood insurance as long as their community participates in the NFIP.
  4. Where can I buy flood insurance?
    • To buy a flood insurance policy, call your insurance agent or contact one of the private insurance companies that write flood insurance under a special arrangement with the Federal government.

WHN TIP – Work with One Agent: It’s a good idea to have the same agent who writes your homeowners or other insurance policies also write your flood insurance policy so in the event you need to file a claim, you only have to work with one insurance agency or company.

  • If your agent does not write flood insurance or you don’t have an agent, you may call the NFIP’s toll- free number 800-621-3362 for more information. For individuals who are deaf, hard of hearing or have a speech disability using 711 or VRS, please call 1-866-337-4262.  For individuals using a TTY, please call 800-462-7585.
  1. What should I ask my insurance agent?
    • Consider asking the following questions. Feel free to omit or add questions of your own. Be sure to take notes about your insurance options.
    • Do I have flood insurance?
    • How much flood insurance should I purchase?
    • How much contents coverage should I purchase?
    • Should I consider a three-year policy to reduce my premiums?
    • Do I qualify for a preferred risk policy?
    • Can I finance my premiums?
  2. How much does flood insurance cost?
    • The average premium is approximately $400 per year depending on where you live and the coverage you choose.
    • Buy as much flood coverage as you would like. Primary residences insured for 80% of their value, or the maximum amounts available, get replacement cost coverage. It pays the amount needed to repair or replace most of the building elements up to the policy limits, without deduction for depreciation, once repairs are made. The NFIP policies have limits of $250,000 for a home’s structure and $100,000 for contents.
    • A flood insurance policy also reimburses you for actions you take to prevent flood damage. For example, costs for moving insured contents, in imminent danger of flooding, to a safe location are reimbursed up to $1,000 with no deductible. Other costs, such as for sandbags, plastic sheeting and lumber, pumps, fill for temporary levees, and wood to save the building can be reimbursed up to a limit of $1,000 with no deductible.

To learn more about flood insurance, visit FEMA’s (Federal Emergency Management Agency) Answers to Questions about the National Flood Insurance Program page.

Photo Credit: Chris Gallagher

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