Some Frequently Asked Questions About Flood Insurance

Doesn't my homeowners insurance policy cover flooding?
No. Flood damage is not covered by your homeowners insurance policy.

If my home is flooded, won't federal disaster assistance pay for my damages?
No. Federal disaster assistance offers loans to help cover flood damage, not
compensation for your losses. Even then, those loans are only available if the President
formally declares a disaster … and less than 10 percent of all weather emergencies in
the United States are declared.

Am I eligible for flood insurance?
You must live in a community that participates in the National Flood Insurance Program (NFIP) to qualify for National Flood Insurance. Find out if your community participates in the NFIP and the kinds of NFIP resources available in your community.

Can I get flood insurance if I'm renting a property?
If you live in a community that participates in the NFIP, you can get flood insurance to cover the contents of your home or business.

Why do I need flood insurance, even though my community has never been
flooded?
The fact that a flood hasn't occurred within recorded history doesn't mean one hasn't happened in the past or that one won't happen soon. Structures located in high-risk flood areas have a significant chance (26 percent) of suffering flood damage during the term of a 30-year mortgage while only a 9 percent chance of loss from fires. A home mapped in a high-risk area is three times more likely to suffer damage from a flood than a fire in the lifetime of a typical mortgage! For these reasons, flood insurance is required as a condition of receiving Federal or federally-backed financial assistance.

Why does my mortgage lender require me to buy flood insurance?
The purchase of flood insurance is mandatory for all Federal or federally-backed financial assistance for the acquisition and/or construction of buildings in high-risk flood areas (Special Flood Hazard Areas or SFHAs). Flood insurance must be maintained
during the term of the loan and is required for the lesser of the maximum amount of available NFIP coverage or the outstanding principal balance of the loan (less the land value).

If the property is not in a high-risk area, but instead in a low- to moderate-risk area, the law does not require flood insurance; however, it is recommended since historically about one-in-four flood claims come from these low-to-moderate-risk areas. Note that if during the life of the loan the maps are revised and the property is now in the high-risk area, your lender will notify you that you must purchase flood insurance. If you do not purchase flood insurance, the lender will force place it, which could be at a much higher rate.

Is there a low-cost policy for homes in low-to moderate-risk areas?
Yes. The Preferred Risk Policy is available in low-to-moderate-risk areas.

I'm not in a high-risk area, but I'd like complete flood coverage. Is this possible?
Yes! You are eligible to purchase a flood policy with the same coverage you would receive if you lived in a high-risk area. That is of course, as long as your community participates in the NFIP. And, you may qualify for the Preferred Risk Policy (a low-cost
flood insurance policy) that provides extremely affordable contents and building coverage.

If you have additional questions, please contact us.