Rain. Hurricanes. Overtopped levees. Outdated or clogged drainage systems. Anywhere it rains, it can flood. A flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.

Floods are the most common natural disaster in the United States. From 2002 to 2011, total flood insurance claims averaged more than $2.9 billion per year. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage. However, losses due to flooding are NOT covered under typical homeowner’s and business insurance policies and require a flood insurance policy for proper protection.


  • Hurricanes and tropical storms cause floods that can create far more damage than high winds.
  • Nor’easters, or extra-tropical cyclones, also cause flooding and storm surge.
  • Heavy rains, winter storms, and spring thaws bring flooding to river basins.
  • Overburdened or clogged drainage systems lead to property damage both within and outside floodplains.
  • Construction and new development affect natural drainage and create new flood risks.

Flood insurance is used to provide protection from rising water. The National Flood Insurance Program (NFIP) operates within the Federal Emergency Management Association, part of the United States’ Department of Homeland Security. NFIP sets all rates, rules and regulations related to flood insurance and these do not differ from agent to agent or insurance company to company. Insurer’s, known as “Servicing Carriers, quote, write and service flood insurance policies that NFIP financially backs but the insurer’s do not set the rates or rules and thus must follow NFIP’s regulations.

If your home is in a high-risk flood area and you have obtained a mortgage through a federally regulated or insured lender, you are required to purchase a flood insurance policy. Just a few inches of water from a flood can cause tens of thousands of dollars in damage. From 2007 to 2011, the average residential flood claim amounted to almost $30,000. Flood insurance is the best way to protect yourself from devastating financial loss.

Available Coverage: Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. Costs vary depending on how much insurance is purchased, what it covers and the property’s flood risk. As with any other type of insurance, it’s important to know what your policy does and doesn’t cover. For example, damage caused by a sewer backup is only covered by flood insurance if it’s a direct result of flooding. The damage is not covered if the backup is caused by some other problem.

Deductible: Deductibles apply separately to building and contents with different amounts to choose from. Like other insurance plans, a higher deductible will lower the premium you pay but will also reduce your claim payment. Your mortgage lender can also set a maximum amount for your deductible.

Lender Requirements: Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance. While flood insurance is not federally required if you live in a moderate-to-low risk flood area, it is still available and strongly recommended.

30 Day Waiting Period: All policy forms provide coverage for buildings and contents. However, you might want to discuss insuring personal property with your agent, since contents coverage is optional. Typically, there’s a 30-day waiting period from date of purchase before your policy goes into effect. That means now is the best time to buy flood insurance. There is typically a 30-day waiting period from date of purchase before a new flood policy goes into effect. Here are the only 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.

Insurance Companies That Write Flood Insurance: The NFIP, a federal program, offers flood insurance, which can be purchased through most leading insurance companies. Rates are set and do not differ from company to company or agent to agent. These rates depend on several factors, including the date and type of construction of your home, along with your area’s level of risk. Most premiums include a Federal Policy Fee and ICC Premium. If your community participates in the Community Rating System (CRS), you may qualify for an insurance premium discount in some communities of up to 45% if you live in a high-risk area and up to 10% in moderate-to-low risk areas.


Flood coverage limits for a standard flood policy are:

Coverage Type Coverage Limit
One to four-family structure $250,000
One to four-family home contents $100,000
Other residential structures $250,000
Other residential contents $100,000
Business structure $500,000
Business contents $500,000
Renter contents $100,000


Moderate To Low Risk Locations

Most homeowners in a moderate-to-low risk area are eligible for coverage at a preferred rate. Preferred Risk Policy premiums are the lowest premiums available through the NFIP, offering building and contents coverage for one low price. In fact, building and contents coverage starts at just $129 per year. If you don’t qualify for a Preferred Risk Policy, a standard rated policy is still available. Even though flood insurance isn’t federally required, nearly 25% of all NFIP flood claims occur in moderate-to-low risk areas.

Higher Risk Locations

If you live in a high-risk area, a standard rated policy is the only option for you. It offers separate building and contents coverage.
The Dwelling Form provides insurance for buildings with one to four units, including single-family condominium units and townhouses. The General Property Form provides insurance for other residential and commercial buildings. Both forms provide flood insurance on contents, but only if you have purchased this optional coverage.


Most condo owners or renters in moderate-to-low risk areas are eligible for coverage at a preferred rate. Preferred Risk Policy premiums are the lowest premiums available through the NFIP, offering building and contents coverage for one low price. In fact, residential premiums start as low as $55 per year for contents-only coverage.
If you don’t qualify for a Preferred Risk Policy, a standard-rated policy is still available. Even though flood insurance isn’t federally required, anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding. When it’s available, disaster assistance is typically a loan you must repay with interest.


If you live in a high-risk area, a standard-rated policy is the only option for you. It offers separate building and contents coverage.


The Residential Condominium Building Association Policy of the Standard Flood Insurance Policy insures residential condominium associations and thus the building in which your unit is located. If you own your unit and it is located in a high-risk flood area, you will be required to purchase flood insurance if your lender is federally regulated or insured.


  • The insured building and its foundation
  • Electrical and plumbing systems
  • Central air conditioning equipment, furnaces and water heaters
  • Refrigerators, cooking stoves and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring
  • Permanently installed paneling, wallboard, bookcases and cabinets
  • Window blinds
  • Detached garages (up to 10 percent of building property coverage); detached buildings (other than garages) require a separate building property 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 that are not included in building coverage
  • Clothing washers and dryers
  • Food freezers and the food in them
  • Certain valuable items such as original artwork and furs (up to $2,500)


  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner
  • Currency, precious metals and valuable papers such as stock certificates
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, 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, including their parts (see Section IV.5 in your policy)


Coverage is limited in basements regardless of zone or date of construction. It’s also limited in areas below the lowest elevated floor, depending on the flood zone and date of construction. These areas include:

  • Basements
  • Crawl spaces under an elevated building
  • Enclosed areas beneath buildings elevated on full-story foundation walls that are sometimes referred to as “walkout basements”
  • Enclosed areas under other types of elevated buildings


Flood insurance premiums are calculated based on factors such as:

  • Year of building construction
  • Building occupancy
  • Number of floors
  • The location of its contents
  • Its flood risk (i.e. its flood zone)
  • The location of the lowest floor in relation to the elevation requirement on the flood map (in newer buildings only)
  • The deductible you choose and the amount of building and contents coverage


In addition to the basic coverage and limits regulated by NFIP/FEMA there is a global market for excess flood insurance available to obtain higher limits for those properties that need them. Whether your risk of flooding at your home or business is greater than the maximum limits available from NFIP/FEMA please contact us for excess flood insurance so as to best protect your property.


Flood 2016 ThumbnailNFIP vs. Private Flood Insurance
There’s a reason why the National Flood Insurance Program was created in 1968 and that reason is because private flood insurers stopped writing such coverage as a result of the losses that they suffered. Private insurers simply got tired of paying claims on homes subject to flooding and were scared off by the continued catastrophic nature of flood losses.
Flood-HFIAA-2015-ChangesFlood HFIAA 2015 Changes
2005’s Hurricane Katrina changed everything. That storm contributed greatly to the National Flood Insurance Program’s current $24 Billion deficit and has since caused many in Washington to look for ways to change the program so as to lower both that deficit and to discontinue federal subsidies that have been included in the rates NFIP charges for decades and that make this flood coverage affordable.
Flood-Verification-of-Primary-ResidenceFlood Verification of Primary Residence Form »
Section 8 of the Homeowner Flood Insurance Affordability Act og 2014 (HIFFA) requires a collection of an annual premium surcharge for NFIP flood insurance policues of $25 on all primary residences and $250 for policies on non-residential properties and non-primary residences.
Private-Flood-InsurancePrivate Flood Insurance »
The ink was hardly dry on the President’s signature of The Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) when a flurry of private companies started to announce that they suddenly had an appetite for private flood insurance.
Private-Flood-Insurance-Be-Aware-of-The-RisksPrivate Flood Insurance Be Aware of The Risks »
The use of private flood insurance policies for risks in the Special Flood Hazard Area (A and V zones) has increased substantially over the past year. The Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) created this opportunity as some pre-FIRM premiums increased by 1,000 percent or more when full risk rates were applied.
New Law To Raise Flood Insurance Rates Dramatically »
Hurricane Katrina devastated New Orleans. The storm that caused extensive flooding in the Crescent City and along the Gulf Coast has, in the years since, also nearly destroyed the National Flood Insurance Program (NFIP).
Flood Insurance Coverage Basics »
Rain. Hurricanes. Overtopped levees. Outdated or clogged drainage systems. Anywhere it rains, it can flood.
Flood Insurance Premium Increase »
Effective October 1, 2009, changes to the National Flood Insurance Program will result in premium rate increases for various risk zones, coverage limits for building & contents as well as standard deductibles offered for pre- and post- FIRM properties.
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