Flood Insurance Coverage Limits Explained – Flooding is the most frequent and costliest natural disaster in the United States. However, the peril of flooding is usually not covered by most homeowner’s and renter’s insurance policies.
With more than 20 percent of National Flood Insurance Program (NFIP) claims coming from outside high flood risk areas, those living in low to moderate flood risk areas should understand their risk and consider flood insurance. The Hawaii Department of Land and Natural Resources’ Engineering Division maintains the Flood Hazard Assessment Tool (FHAT) to determine flood risk. Risk levels are divided into three categories:
Flood Insurance Coverage Limits Explained
High-risk areas have at least a 1 percent chance of flooding each year. Homeowners in these areas who have mortgages from federally regulated or insured lenders are required to purchase flood insurance.
Understanding Fema Flood Maps And Limitations
Moderate to low risk areas have less than a 1 percent chance of flooding each year, but the potential for flooding in the area still exists. Flood protection is not required in these areas, but it is recommended. Some mortgage lenders still require you to have flood insurance in low-risk areas.
Flood insurance is separate coverage that can be purchased through the National Flood Insurance Program (NFIP) administered by FEMA, or sometimes through a private insurance company. Your agent can help you with an NFIP policy or a private insurer policy. To learn more about purchasing an NFIP policy, contact the NFIP Referral Center at 1-800-427-4661. For more information about private insurers that write flood coverage in your state, contact your insurance department.
If you are choosing a private flood insurance policy, review and compare coverage and premiums before deciding which policy to buy. Be sure to ask about the waiting period. NFIP and some private flood policies have a 30-day waiting period unless the policy is purchased at the same time as a newly purchased home.
A standard NFIP flood insurance policy covers direct physical damage to your insured property up to the lesser of the replacement value or actual cash value (ACV) of the actual loss or policy limits.
Digital Flood Insurance Rate Map
Homeowners Content: The Building Property form of coverage does not cover personal property in your home. However, coverage is available up to $100,000 for an additional premium.
Business Owners: The building property form of policy does not cover personal property. However, coverage is available up to $500,000 plus premium.
Private insurers may have higher limits or broader coverage than NFIP policies. Work with your agent to understand the private policy and compare it to the NFIP policy. Flood insurance is usually a separate policy designed to protect your home and belongings if they are damaged in a flood. Standard property insurance policies, such as homeowners insurance, typically do not cover flood damage.
Flood insurance is a separate policy. Your insurance agent can help you purchase it through the federal government’s National Flood Insurance Program.
Do I Need Flood Insurance?
[Voiceover] Construction property insurance helps pay for repairs to the physical structure of your home, its foundation and components, such as siding and interior walls, flooring, plumbing and electrical materials, if they are damaged by floodwaters.
[ON SCREEN] Your policy coverage depends on the extent of the damage to your home, but will not exceed the coverage limit.
[VOICE-OVER] Flood insurance can provide up to $250,000 in property coverage for a building. Flood insurance also includes personal property coverage, which helps pay for repairs or replacements for your belongings, such as clothing, furniture and electronics.
[ON SCREEN] Your policy coverage depends on the value of your damaged items, but will not exceed your coverage limit.
The National Flood Insurance Program
[Voiceover] A flood insurance policy can provide up to $100,000 in coverage for your belongings. Keep in mind, however, that while flood insurance may cover appliances like a furnace in your basement, it doesn’t cover damage to things you store there, or damage to things like walls and floors in basements.
A local agent can help you learn more about flood insurance and purchase a policy through the National Flood Insurance Program, if available in your area.
[ON SCREEN] This content is for informational purposes only and may not be applicable in all situations. Subject to National Flood Insurance Program terms, conditions and availability. The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA), a component of the US Department of Homeland Security (DHS). NFIP flood policies are underwritten by the federal government and sold and administered by private insurance companies, such as through the Write Your Own (WYO) program. © 2019 Insurance Company, Northbrook, IL.
In some cases, you may need flood insurance. If you own a home on land that is at high risk of flooding, your mortgage lender may require you to carry flood insurance, according to FloodSmart.gov.
What Does Flood Insurance Cover?
However, flood insurance isn’t just for homes in high-risk areas. The Federal Emergency Management Agency (FEMA) reports that all 50 states have experienced flooding and that more than 20 percent of the claims it processes come from moderate or low risk areas.
Flood insurance is usually available to people in communities that participate in the National Flood Insurance Program (NFIP). Flood insurance policies can be purchased through your insurance company for homeowners, business owners and renters who want to protect their homes, buildings and property. (A landlord can purchase separate flood insurance policies to protect the home.)
So what does the policy help to protect against flooding? FEMA says you can purchase insurance coverage to protect your home, personal belongings, or both. Here are some of the basics for these two types of coverage:
You usually have to wait 30 days for your policy to take effect, although there are some exceptions. For example, if you buy a flood insurance policy at the same time as you take out a mortgage, the coverage can take effect immediately, according to FEMA.
What Is The Difference Between Ho2 And Ho3 Homeowners Policies?
It is equally important to know what flood insurance does not cover. Here are some examples of the types of property and expenses that fall outside of a basic flood insurance policy, according to the NFIP:
Additionally, flood insurance provides limited (if any) coverage for underground spaces, such as basements and basements, and their contents, the NFIP said. Some items in these rooms (such as a stove) are usually included under the building’s covering. Others (like a washer/dryer) are usually covered by personal property insurance. And some items, like your personal belongings, may not be protected at all when stored underground.
Talk to your insurance provider to make sure you clearly understand the coverage details, exclusions and limitations of your flood insurance policy and to help you make the right choice for your situation.
Of course, you should also remember that flooding isn’t the only potential source of water damage to your home. That’s why, in addition to understanding the potential benefits of flood insurance, you should also review the coverages offered by your homeowners insurance policy.
Ways To Dramatically Lower Your Home Insurance Costs
Armed with the knowledge and insurance coverage that’s right for you, you’ll go a long way toward protecting your home from water damage. Flood insurance protects you against damage to your home and personal property caused by rising water from an outside source, such as a flooded street. This is NOT part of a standard homeowner’s policy and must be purchased separately. Recent weather events in Texas and the United States have shown the devastation that flooding can cause, so this is important coverage to consider.
Texas Flood Insurance Houston Flood Insurance Katy Flood Insurance The Woodlands Flood Insurance Sugar Land Flood Insurance
Flood insurance can be purchased through private insurance companies or through a federally regulated program called the National Flood Insurance Program (NFIP). Flood insurance can cover the physical structure and its contents for both residential and commercial properties. NFIP coverage only covers up to:
You can purchase additional flood coverage to increase the amount protected, as the federal program only covers the amount above.
How To Find The Best Flood Insurance Companies
Flood insurance coverage may differ when purchased through private insurance companies and through the NFIP. The table below provides a brief comparison of flood insurance through the federal government and a private insurance company:
It is important to note that not all properties are covered by private flood insurance. Talk to an independent agent who has access to several private flood markets to make sure you’re looking at all the options available to you.
The cost of flood insurance mainly depends on the flood zone, the height of your home, the amount of coverage chosen and the deductible.
If you are in a high/moderate risk area like Zone X, the cost of flood insurance through the NFIP is very affordable.
What Does Homeowners Insurance Cover In 2022?
FEMA assigns a flood zone to every property, and more than 20,000 communities are in flood risk zones, meaning they are more susceptible to the risk of flooding. The following table shows the flood zones and their characteristics:
If your property is in a high-risk area, the value will vary depending on the height of your home. We recommend obtaining a height certificate, although some private insurers may not require it.
You can get a copy from the current home owner or
