How FEMA’s National Flood Insurance Program (NFIP) Works for Homeowners

Buying NFIP flood insurance could be the difference between losing your home in a flood or receiving adequate compensation after flood damage. If you’re worried about flood damage, then it’s important to understand how FEMA’s NFIP flood insurance works.

How FEMA’s National Flood Insurance Program Works

The Federal Emergency Management Agency (FEMA) operates the National Flood Insurance Program (NFIP), providing flood insurance to homeowners and business owners across the United States.

The goal of the NFIP, according to FEMA.gov, is to help reduce the socio-economic impact of floods.

To do that, the NFIP:

• Works with 50+ insurance companies across the United States to provide flood insurance to homeowners and business owners.
• Fills the flood insurance gap in most insurance policies, as a standard homeowners insurance policy does not cover flood insurance.
• Provides coverage to property owners, renters, and businesses to help them recover faster and floodwaters recede.
• Identifies high-risk flood areas across the United States.
• Allows homeowners and business owners to buy coverage in areas where private insurance industries would not normally do business.

How to Buy Flood Insurance from the NFIP

It’s easy to buy flood insurance through the NFIP.

In most cases, in fact, you simply call your ordinary insurance company or agent and buy flood insurance as you normally would buy a policy. As long as your insurer partners with the NFIP, you should be able to add flood insurance to your homeowners insurance policy as easily as adding other types of insurance.

To purchase flood insurance:

• Call your ordinary insurance company or insurance agent. The NFIP partners with 50+ insurance companies across the United States to provide flood insurance to policyholders.
• For help finding a provider, use FloodSmart.gov/flood-insurance-provider. Or, call the NFIP directly at 877-336-2627.
• Be aware of the 30-day waiting period: in most cases, you need to wait 30 days for your NFIP flood insurance to go into effect.
• You may be able to avoid the 30-day waiting period if coverage is mandated (say, if it’s required by a federally backed lender) or if you’re adding flood insurance after a change in community flood maps.

You can add flood insurance to your ordinary homeowners insurance policy and continue to pay for coverage through your ordinary homeowners insurance policy premiums. In most cases, adding flood insurance to a policy is seamless and easy.

How Much Does Flood Insurance Cost?

The average homeowner pays $836 per year for flood insurance through the NFIP.

Generally, flood insurance is an affordable way for homeowners and business owners to protect themselves in flood-prone areas.

However, the cost of flood insurance varies widely based on location, risk, and other factors. You can view detailed calculations at FEMA.gov here.

Some of the factors that influence flood insurance premiums include:

• Median replacement cost in area.
• Likelihood of different types of flood-related perils (like flash floods, coastal erosion-related damage, flood damage by high waves, and other types of flood damage)
• Characteristics of the building that could affect extent of flood damage (like first floor elevation and foundation type)
• Elevation and distance from sources of flooding (like the distance to the shoreline, river, coast, or lake)
• Additional characteristics that could impact risk, like flood vents or other building adaptations
• Local flood mitigation measures, including levee performance

Overall, the NFIP aims to assess a fair value for flood insurance based on each home’s specific risk. Because of this home-specific risk calculation, it’s possible for two homeowners in the same neighborhood to pay different rates for flood insurance – even when they have the same regional flood risk from the same local body of water.

What Does Flood Insurance Cover?

Flood insurance covers both your property and the contents inside your property – similar to how an ordinary homeowners insurance policy works.
Items covered by a standard NFIP flood insurance policy include:

Building coverage, which covers foundations, electrical and plumbing systems, permanently installed cabinets, window blinds, foundation walls, detached garages, furnaces, and water heaters, among other items

Contents coverage, which covers clothing, furniture, appliances, personal electronics, carpets, valuable items (up to $2,500), curtains, and portable and window air conditioners, among other items

As long as you purchase and maintain flood insurance coverage, and as long as you’re past the 30 day window, your NFIP flood insurance should cover the items listed above for the duration of your policy.

What Does Flood Insurance Not Cover?

Flood insurance does not cover everything.

Some of the items not covered by flood insurance include:

• Temporary housing and additional living expenses incurred as a result of the flood.
• Property outside of an insured building, including landscaping, decks, patios, hot tubs, and swimming pools that may have been damaged by flooding.
• Currency, precious metals, stock certificates, and certain other valuables damaged by flooding.
• Cars damaged by flooding.
• Personal property kept in basements.
• Sewer backup damage when the backup was not caused by flooding.

Do You Need Flood Insurance? Understanding Flood Zones

The NFIP assesses risk based on flood zones. Depending on where your home is located, you may or may not need to buy flood insurance (or be able to buy flood insurance from the NFIP whatsoever).

The NFIP determines risk based on the following flood zones:

Zone A: Zone A communities have high risk of flooding. If you live in Zone A and have a federally backed mortgage, then you must purchase flood insurance.

Zones V and VE: Zones V and VE are high-risk coastal areas with additional hazard from storm waves. There’s a 26% chance of flooding over the life of a 30-year mortgage. If you live in a home in zone V or VE, then you must buy flood insurance with a federally backed mortgage.

Zone D: Zone D areas have an undetermined risk of flooding. No flood hazard analysis has been conducted in these areas.

Zones B & X: Zones B and X have a moderate risk of flooding – typically between a 100-year and 500-year flood risk. B zones are floodplains with lesser hazards – like areas protected by levees or areas with shallow flooding (flooding less than 1 foot).

Zones C & X: Zones C and X have minimal flood risk. A home in Zone C could have a local pond or drainage problem. Zones C and X properties overall, however, have low flood risk above the 500-year flood level.

Regardless of your flood zone, you may want to buy flood insurance. As the NFIP explains, all of the zones carry flood risk:

Every zone carries a flood risk; it’s just a matter of how big the risk is.

Additionally, the NFIP recommends checking your flood risk annually, as flood zones can change.

For additional information about flood zone maps and flood risk in your area, check FloodSmart.gov.

Being Prepared for Flood Damage Insurance Claims

The National Flood Insurance Program (NFIP) protects homeowners across the United States from the risks of flooding.

To buy NFIP flood insurance, contact one of 50+ partner insurers and buy the coverage you need. Costs vary based on your flood zone and other factors. Be sure to tell your agent that you want the maximum amount of coverage for a business or residential property as this is the only one that will pay the full amount of damage to you under a Replacement Cost policy. All lower limits are only paid on an Actual Cash Value basis which removes monies for depreciation of the damaged property.

Contact your insurance company or insurance agent to get the NFIP flood insurance you need to protect your home.

If you need help dealing with a flood damage insurance claim contact a public adjuster with ClaimsMate for a free consultation.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.