Flood Insurance FAQs
There are a lot of questions, myths, and misconceptions about flood insurance and how FEMA disaster assistance works, who is eligible, etc. These Q&As can help you navigate this complex and often-confusing topic. For starters, your home, condo unit, or renter’s insurance doesn’t cover you for damage caused by floods.
The Dynamic Dozen - 12 Top Flood Insurance Questions Answered
A policy with “Comprehensive” coverage provides coverage for all causes of loss, except those that are specifically excluded by the policy. Most policies include language that specifically excludes coverage for water damage caused by the following, which are detailed in this excerpt from the Insurance Services Office, Inc.:*
- Flood, surface water (such as rainfall), waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;
- Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or
- Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; caused by or resulting from human or animal forces or any act of nature.
If your property is damaged by a flood and you don't have flood insurance, you will likely have to pay for the repair damages out of pocket. This can be very expensive, so it's important to have flood insurance to protect yourself. Just one inch of water can cause $25,000 in damage to your home.
Use this free “Cost of Flood” estimator tool to estimate the cost of flood damage to your home. Just keep in mind that this tool uses the depreciated value of your belongings - not the estimate for the cost needed to replace them with new versions of the same type and quality.
The following information is provided by the Federal Emergency Management Agency (FEMA).
- FEMA assistance is not a substitute for insurance. It provides assistance only for repairs needed to make a home safe, sanitary, and functional (PDF 41kb)
- Before a community is eligible for federal disaster assistance, it must be designated a federal disaster area. This happens in less than 50% of flooding incidents. Flood insurance will pay claims regardless of whether there is a Presidential Disaster Declaration.
- Federal disaster assistance comes in two forms: a loan, which must be paid back with interest, or a FEMA disaster grant, which is about $5,000 on average per household. By comparison, the average flood insurance claim in 2021 was $44,401.
- You must meet eligibility requirements for a FEMA claim.
Two types of flood insurance are available: the standard National Flood Insurance Policy and private flood coverage. Flood insurance covers most damage to your property caused by floodwaters. It can include your home, garage, barn, shed, other structures on your property, and your personal belongings. Here are some examples:
The building coverage section of the policy protects property such as:
- Electrical and plumbing systems
- Furnaces and water heaters
- Refrigerators, cooking stoves, and built-in appliances like dishwashers
- Permanently installed carpeting
- Permanently installed cabinets, paneling, and bookcases
- Window blinds
- Foundation walls, anchorage systems, and staircases
- Detached garages
- Fuel tanks, well water tanks and pumps, and solar energy equipment
The contents section of the policy protects your personal property, such as:
- Personal belongings such as clothing, furniture, and electronic equipment
- Washer and dryer
- Portable and window air conditioners
- Microwave oven
- Carpets not included in building coverage (e.g., carpet installed over wood floors)
- Valuable items such as original artwork and furs (up to $2,500)
Some programs also offer additional coverage options such as:
- “Additional Living Expense/Loss of Use” coverage, which would pay for expenses (up to $55,000) that you incur while you cannot live in your home and that are over and above your daily living costs – for example, motel stays, restaurant meals, or pet care
- Extra expenses you incur to be compliant with new building codes (laws or ordinances) when/if you rebuild your property in the same location
- Claim payments for your belongings that are made on a “replacement cost value” basis, which means the payment amount is not reduced based on age or wear of the items
It depends on where you live. If you are a homeowner with an active mortgage and live in a high-risk flood zone, your mortgage lender may require you to have flood insurance.
Coverage availability and homeowner eligibility varies by program.
Coverage through the National Flood Insurance Program (NFIP) is available to individuals who own a single-family home in one of the 23,000 participating NFIP communities in the United States.
You can see if your community is a participant by checking out this FEMA Community Status resource.
Other programs are available in AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, LA, MA, MD, ME, MI, MN, MS, MT, NC, ND, NE, NJ, NM ,NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, WI, and WV.
You can buy federal flood insurance no matter where you live if your community participates in the NFIP. The NFIP was created in 1968 to provide flood insurance to people who live in areas with the greatest risk of flooding, called Special Flood Hazard Areas (SFHAs), also known as the 100-year floodplain or the regulatory floodplain.
Under the National Flood Insurance Act, lenders (such as mortgage holders) must require borrowers whose property is within an SFHA to purchase flood insurance as a condition of receiving a federally backed loan.
Even if you don’t live in a high-risk flood zone, it’s a good idea to have flood insurance because flooding can – and does – occur anywhere. As of early 2023, 99% of counties in the United States experience annual flooding; people outside of high-risk areas file more than 25% of NFIP claims and receive one-third of disaster assistance for flooding.
Poor drainage is the most common reason that homes on a hill experience flood damage. Rain and snowmelt follow the slope of the hill – often into your home. Major flooding in the hills and mountains of Kentucky, Montana, Wyoming, and other states caused massive destruction in 2022.
The NFIP provides a maximum of $250,000 for a single-family dwelling that has an amount of homeowners insurance that’s equal to 80% of the cost to rebuild the home. It provides up to $100,000 of coverage for your belongings (it pays the actual cash values, which means the payment is reduced based on the items’ age and wear). Coverage for condominium unit owners and renters is for belongings only.
Other programs offer a maximum of $1 million of coverage on your home with no dwelling type or occupancy requirements, and up to $250,000 for your belongings. Unlike NFIP coverage, payments for your belongings are made for “replacement cost value,” which means the payment amount is not reduced based on age or wear of the items.
The cost of flood insurance varies based on a variety of factors, including the flood risk of your property, the amount of coverage you need, and the deductible you choose. Average annual premiums for NFIP polices are approximately $613 – $985, often less than the annual interest on most low-interest disaster loans.
The NFIP has a mandatory 30-day wait unless the policy is purchased in conjunction with a home loan closing. Other programs do not have a waiting period.
You Need a Risk Coach™
A 2022 survey found that 96% of respondents misunderstood at least one important feature of their coverage. More than half misunderstood several. We want better than that for our clients. So, our Risk Coach consultants are licensed insurance professionals who are trained to look at coverage from your perspective. They help ensure you get the right flood coverage for your level of risk to your property and belongings
How Do I Get a Quote for Flood Insurance?
Call or use chat to contact a Risk Coach. Our Risk Coach consultants are glad to help you navigate the complexities of the NFIP and other flood insurance. Use the Chat feature on this page, or call us for a no-cost, no-obligation-to-buy flood coverage needs assessment. We’re available at 800.342.5342 Monday through Friday, from 8:00 a.m. to 8:00 p.m. ET.