A standard homeowner's policy does not cover flooding. It's important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact us nationwide. insurance protects your building and personal property.
What building* coverage includes
- The insured building and its foundation
- The electrical and plumbing system
- Central air conditioning equipment, furnaces, and water heaters
- Refrigerators, cooking stoves, and built-in appliances such as dishwashers
- Permanently installed carpeting over unfinished flooring
* Homes with finished basements, and homes that are rated elevated, with an enclosure, have limited coverage in the basement, and in the areas below the elevated floor. Please refer to Floodsmart.gov for more information.
What contents coverage includes
- Clothing, furniture, and electronic equipment
- Portable and window air conditioners
- Portable microwaves and dishwashers
- Carpeting that is not already included in property coverage
- Clothing washers and dryers
The reimbursement methods for flood claims are: Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the method used for primary residences insured to within 80% of the buildings replacement cost.
All other buildings and personal property (i.e. contents) are valued at ACV. The ACV is the RCV at the time of loss minus physical depreciation. Personal property is always valued using the ACV.
NFIP and limits
The maximum residential limits provided by the NFIP are $250,000 for building coverage and $100,000 for personal property coverage. If you require higher limits of protection, then you should consider purchasing Excess Flood insurance, which is available through our agency.
Not covered by flood insurance
- 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
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. You can find out if your community participates in the NFIP and the kinds of NFIP resources available in your community by visiting The National Flood Insurance Program Community Status Book.
How do I know if I need flood insurance?
Since standard homeowners insurance doesn’t cover flooding, it’s important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the U.S.
In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.
FEMA recommends determining your risk level:
- High Risk Areas – In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage. All home and business owners in these areas with mortgages from federally regulated or insured lenders are required to buy flood insurance. They are shown on the flood maps as zones labeled with the letters A or V.
- Moderate to Low Risk Areas – In moderate-to-low risk areas, the risk of being flooded is reduced but not completely removed. These areas submit over 20% of NFIP claims and receive one-third of disaster assistance for flooding. Flood insurance isn’t federally required in moderate-to-low areas, but it is recommended for all property owners and renters. They are shown on flood maps as zones labeled with the letters B, C or X (or a shaded X).
- Undetermined Risk Areas – No flood-hazard analysis has been conducted in these areas, but a flood risk still exists. Flood insurance rates reflect the uncertainty of the flood risk. These areas are labeled with the letter D on the flood maps.
Why would I need flood insurance if I live on a hill and will never get flooded?
Floods can occur in any area, although to varying degrees. If you live on a hill or in an area that has never been flooded, your risk may be significantly reduced, but it is not eliminated.
Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed protective devices such as levees and dams, as well as by tropical storms and hurricanes. Please make an informed decision about the flood risks you face before deciding not to purchase flood insurance.
What is covered in my basement?
Flood insurance covers your home’s foundation elements and equipment that’s necessary to support the structure (for example: furnace, water heaters, circuit breakers, etc.).
It’s important to note that some items in your basement are covered under building coverage (like a furnace, hot water heater and circuit breaker) and others are covered under contents coverage that must be purchased in addition to building coverage (for example, your washer and dryer, or your freezer and the food in it).
The NFIP encourages people to purchase both building and contents coverage. Flood insurance does not cover basement improvements, such as finished walls, floors, ceilings or personal belongings that may be kept in a basement. For a complete list of what’s covered, view the Standard Flood Insurance Policy (SFIP) Forms.
Which flood facts are important to know?
There are many important facts to point out when on the topic of flooding.
- In the past 5 years, all 50 states have experienced floods or flash floods.
- Everyone lives in a flood zone. (For more information, visit our Flood Zones FAQs.)
- Homeowners’ insurance does not cover flood damage.
- If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance. (To find your flood risk, fill out the Flood Risk Profile.)
- Just a few inches of water from a flood can cause tens of thousands of dollars in damage.
- Flash floods often bring walls of water 10 to 15 feet high.
- A car can easily be carried away by just two feet of rushing water.
- Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding.
- New land development can increase flood risk, especially if the construction changes natural runoff paths.
- Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
- A Preferred Risk Policy provides both building and contents coverage for properties in moderate- to low-risk areas for one low-price.
- You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.
- In most cases, it takes 30 days after purchase for a policy to take effect, so it’s important to buy insurance before the storm approaches and the floodwaters start to rise.
- In a high-risk area, your home is more likely to be damaged by flood than by fire.
- Even though flood insurance isn’t federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file over 20-percent of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.
- From 2005 to 2014, total flood insurance claims averaged more than $3.5 billion per year.
- When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium reduction discount of up to 45% if you live in a high-risk area and up to 10% in moderate- to low-risk areas.
- Since 1978, The NFIP has paid nearly $50 billion for flood insurance claims and related costs (as of 2/17/15).
- There are currently more than 5.3 million flood policies in force across more than 22,000 communities in the U.S.
- The two most common reimbursement methods for flood claims are: Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to at least 80% of the building’s replacement cost.
How can I determine my flood risk?
Visit FEMA’s FloodSmart.gov page and complete the Flood Risk profile..
What do these flood terms mean?
You can learn what the terms mean by visiting FEMA’s FloodSmart.gov glossary.
Content provided by FloodSmart.gov