Flood Insurance

What is Flood insurance?

Every property is vulnerable to flooding. Flooding can happen anywhere, at any time. In fact, more than 20 percent of the National Flood Insurance Program claims come from outside high-risk flood areas. That’s why it’s important to protect the life you’ve built with flood insurance, even if you live in an area with low-to-moderate flooding risk. The NFIP covers flooding resulting from hurricanes or other weather events.

In the event of a flood, federal disaster assistance may be limited or unavailable. Federal disaster assistance is available only if the president declares a disaster. Your home is covered by flood insurance even if a disaster is not declared. Disaster assistance comes in two forms: A U.S. Small Business Administration loan, which must be paid back with interest, or a FEMA disaster grant, which is about $5,000 on average per household. Both programs have strict eligibility requirements based on individual need and many disaster survivors may not qualify. By comparison, the average flood insurance claim is nearly $30,000 and does not have to be repaid.

WHEN IS FLOOD INSURANCE REQUIRED? If your home falls in a high-risk flood area and you have a mortgage from a federally regulated or insured lender, your lender is legally mandated to require you to have flood insurance, FEMA says. Typically, that's not the case if your home falls in a moderate-to-low risk area.

What does Flood insurance cover?

The National Flood Insurance Program defines covered flooding as any temporary event where the surface of normally dry land is partially or completely underwater. Flooding can be caused by:

  • Overflow of inland (lake or river) or coastal waters
  • Pooling or runoff of surface waters from any source, such as heavy rainfall
  • Mudflows
  • Collapse of land along the shore of a lake or other body of water due to wave or water currents.

Flood insurance is available for individuals in participating communities. Today, more than 22,000 communities participate in the NFIP and most people who live in participating communities, including renters and condo unit owners, can purchase NFIP flood insurance. Flood insurance coverage is not limited to properties in a high-risk flood area. That’s why it’s important to secure flood insurance; because everywhere it can rain in these communities, it can flood. Those living in Coastal Barrier Resources Systems (CBRS) or other protected areas are not eligible for NFIP coverage.

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