Secured with SHA-256 EncryptionFlood Insurance for Homeowners
Flood Insurance for Your Home
Floods are one of the most common natural disasters in the United States. Unfortunately, they are also the most expensive, which is why most private insurance companies won’t cover them. What’s worse is that it doesn’t look like the devastation from floods is going to be less frequent or less costly in coming years. Even if you don’t believe in climate change, it’s hard to deny the billions in damage that floods do every year – and the fact that that number is increasing on an annual basis.
The National Flood Insurance Program (NFIP)
Although FEMA has been around since the late 70’s, the NFIP can trace its roots back to 1968 when the National Flood Insurance Act was first passed. This legislation provided flood insurance to homeowners for the first time in American History.
NFIP flood insurance is not a valued or guaranteed policy; it only pays out either the replacement cost or actual cash value of your damaged/destroyed property, up to your policy coverage limits. The NFIP pays out on claims regardless of whether or not an official disaster has been declared. It is also a much more reliable means of procuring financial assistance after flood damage has devastated your home and property. Ulike SBA (Small Business Administration) loans, which must eventually be paid back, or inadequate FEMA recovery grants, the NFIP makes it easier to get an adequate amount of financial resources to help you recover from flood damage.
| Type of Coverage | Maximum Amount |
| Dwelling Coverage | $250,000 |
| Personal Property Coverage | $100,000 |
| ICC Coverage | $30,000 |
Most NFIP policies cover the dwelling (or external structure) of your home. If you would like to purchase personal property coverage, you may – but you must also understand that these policies are separate from the policy which you take out on your home.
One of the few limitations for procuring flood insurance is that you must live in a NFIP-participating community. If you aren’t sure, you can visit the NFIP homepage and look for a link to the Community Status Book. Additionally, you have to purchase a policy through an insurance agent. Most insurers have agents that can help you with this process. If you can’t find one in your area, you should visit the NFIP website and call their toll-free referral number. Their operators can help you with an agent referral.
Private Flood Insurance Policies
Although rare and sometimes hard to get, there are a handful of private companies out there who are willing to sell private policies to home and/or property owners. Whether you find a better deal through a private insurer or simply don’t want your government treading on you, there are some reasons why getting flood coverage from a private company may yield some benefits for your personal situation. For instance, some companies are willing to offer expanded coverage limits compared to what the NFIP is capable of.
| Type of Coverage | Maximum Amount |
| Dwelling Coverage | $500,000 |
| Personal Property Coverage | $250,000 |
| ICC Coverage | $30,000 |
There are some limitations on private coverage, however. For starters, even the most popular programs are only available in 37 states. Furthermore, these private policies are limited to homes which are located in a FEMA-participating county. In most other ways, though, private policies and NFIP policies are nearly identical. Private policies will honor claims on dwelling coverage the same way that a NFIP claim would be handled. They even use the same pool of claims adjusters to come out and evaluate your damages.
In the chart below, you can start to get an idea of how much you might be expected to pay for a private flood insurance policy. We collected our data based on a slab-on-grade single family home with $250,000 of dwelling coverage and $100,000 of personal property coverage and a $2,000 deductible (which was the lowest deductible amount we could find).
Flood Insurance Premiums
Legend:
$2,000 Deductible
Florida
Oklahoma
Texas
California
New Jersey
Kansas
Washington
250
500
750
1000
1250
1500
1750
2000
2250
2500
2750
$2869
$2893
$2866
$2817
$2866
$2893
$2787
In the chart below, you can find the same values with a higher, $5,000 deductible. All other metrics are the same.
Flood Insurance Premiums
Legend:
$2,000 Deductible
$5,000 Deductible
Florida
Oklahoma
Texas
California
New Jersey
Kansas
Washington
250
500
750
1000
1250
1500
1750
2000
2250
2500
2750
$2869
$2593
$2893
$2615
$2866
$2590
$2817
$2546
$2866
$2590
$2893
$2615
$2787
$2519
Learn More
For more information about important homeowners insurance topics, take a look at the following pages:
Homeowners Insurance FAQ