Back HomeConfused About Flood Insurance?
The National Flood Insurance Program is a pre-disaster flood mitigation and insurance protection program designed to reduce the escalating cost of disasters. The National Flood Insurance Program makes federally backed flood insurance available to residents and business owners. Standard flood insurance by the National Flood Insurance Program generally covers physical damages directly caused by flooding within the limits of the coverage purchased. Private providers may have higher limits or broader coverage compared to National Flood Insurance Program policies.
A flood insurance policy is intended to cover physical damage to your building or personal property “directly” caused by a flood. Flood insurance covers damage caused by hurricanes, rivers, and tidal waters. Flood insurance covers water that rises, wind insurance covers water damage cause by blowing water, rain, etc. that enter or damage the property due to wind damage to the property.
Flood insurance rates are determined by several factors, including:
- The amount and type of coverage
- Location and flood zone
- Design and age of your home
- Elevation (for homes in high-risk areas built after the first Flood Insurance Rate Maps were drawn)
Losses due to flooding are not covered under most homeowners’ insurance policies. It is recommended that homeowners add a Florida Flood Insurance policy to ensure complete protection of your home in case of a hurricane strike.
In some flood zones, flood insurance is affordable at about $1.40 per day (average is $503 per year), and the U.S. government provides a 100% guarantee.
Flood insurance typically requires a 30-day waiting period on new policies. Here are the exceptions:
- If flood insurance is being purchased in connection with the creation, increasing, extending, or renewing of your mortgage loan.
- If your home has been recently designated in the SFHA and flood insurance is being purchased within the 13-month period following a map revision.
- If flood insurance is required because of a lender determining that your mortgage 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.
- If your home is affected by flooding on burned Federal land that is a result of, or is exacerbated by, post-wildfire conditions when the policy is purchased within 60 days of the fire containment date.
Flood risk zones are identified by the National Flood Insurance Program (NFIP) and are divided into the following three categories:
High-Risk Zone
There is at least a 25% chance of flooding during a 30-year mortgage. All homeowners in high-risk zones with mortgages from federally regulated or insured lenders are required to purchase flood insurance.
Zones: A, V
Moderate to Low-Risk Zone
The risk of flooding is reduced but not completely removed. Even if you live in a moderate-to-low-risk zone, it’s recommended that you purchase flood insurance. About 25 percent of all flood insurance claims come from areas with low-to-moderate flood risk. On average, only two inches of water in your home can cause $7,800 or more in damage. Poor drainage systems, rapid rainfall accumulation, and broken water mains can all result in flooding.
Zones: B, C, or X
Undetermined Risk Zone
No flood-hazard analysis has been conducted, but a flood risk still exists. Flood insurance rates reflect the uncertainty of the flood risk.
Zone: D
Only a licensed property and casualty insurance agent can sell NFIP flood insurance. Customers can find a local one using FEMA’s Agent Locator Tool.
Kim N. Bregman