What to Know About Flood Insurance

Flood Insurance: Understanding the Basics

Flooding is the most common and costly natural disaster in the United States

There is NO coverage for flooding under a standard homeowner or renters policy or most commercial policies
Flood insurance can only be purchased through an insurance agent; you cannot buy it directly from the federal government

Flood policies will cover:

Residential buildings up to $250,000 and non-residential buildings up to $500,000
Residential contents up to $100,000 and non-residential contents up to $500,000
Excess flood coverage may be available through the private sector

Flood policies will NOT cover:

Damage caused by moisture, mildew or mold that could have been avoided by the property owner
Currency, precious metals, and valuable papers
Property outside, such as trees and plants, wells, septic systems, decks, fences, pools, hot tubs, etc.

Living expenses such as temporary housing

What are flood insurance premiums based on?

Flood insurance premiums are based on a number of factors:
- Age of the property
- Style of your home’s construction
- The elevation of a structure in relation to the Base Flood Elevation (BFE). The BFE is the elevation where there is a 1% or greater annual chance of flooding.
For properties in high-risk zones, you must get an Elevation Certificate in order to determine the full risk premium.
Elevation Certificates are required for property in high-risk zones.

What is an Elevation Certificate and how do you get one?

An Elevation Certificate is a form completed and signed by a licensed engineer or land surveyor
There are a series of measurements needed to determine your home’s “lowest floor” in relation to the BFE
If you are buying from a previous owner, check with them to see if they have an Elevation Certificate. The certificates remain valid, regardless of age, as long as there have been no significant changes/improvements made to the property. You can also call a local surveyor or engineer to request an Elevation Certificate for your property.

Is there a waiting period before Flood Insurance goes into effect?

Typically, there is a 30-day waiting period from the date of application before your policy goes into effect. There are very limited exceptions.

How much does Flood Insurance cost?

Rates are set and do NOT differ from company to company or agent to agent
Higher deductibles can lower your premium; deductibles apply separately to buildings and contents

Are there mandatory requirements regarding purchasing flood insurance?

Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance
Lenders can require flood insurance even if it is not federally required

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