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Flood Insurance

Why do I need to rethink insurance?


If you were hit by a flood or other natural disaster today, would you have enough money to rebuild? The truth is, probably not. In fact, two out of every three homes in the United States are underinsured when it comes to natural disasters such as earthquakes and floods, and many don’t know it. 

This is mainly because many property owners don’t carry enough insurance to cover damage from wildfires, extreme wind events and hurricanes. And most homeowners and renters insurance policies typically do not cover damage from natural disasters like floods and earthquakes.  In fact, approximately 80 percent of the residents in the areas hit hardest by Hurricane Harvey in 2017 did not have flood insurance.

Everyone needs to rethink their insurance coverage and make sure they’re adequately covered from disaster losses including flood.

Floods can happen anywhere at any time during the year. You do not need to live near the coast to experience a flood. They happen in all 50 states and 98% of counties in the US have experienced a flooding event.

Floods are the most common and costly natural disaster in the US. Just an inch of water can cause up to $25,000 in damage. Without flood insurance, you are left to cover that cost on your own. Federal disaster aid provides limited help for property owners, often in the form of a loan which must be paid back.
Insured survivors are able to recover faster and more fully from floods or other catastrophic events than their uninsured neighbors. Across the board, families and communities which have the most hope after a disaster are the ones who’ve made adequate insurance coverage part of their resilience strategy.

Check ALL of your insurance coverage. Talk with your insurance agent if you have proper coverage for disaster losses – even from events you don’t think are as likely to happen like earthquakes and flood. Consider buying a flood insurance policy from the National Flood Insurance Program.  Call your insurance agent or visit to learn more.

National Flood Insurance Program

In 1968, the US Congress created the National Flood Insurance Program (NFIP). Their intent was to reduce future damage and to provide protection for property owners from potential loses through an insurance mechanism that allows a premium to be paid by those most in need of the protection. The Federal Emergency Management Agency (FEMA) produces Flood Insurance Rate Maps (FIRM) that shows areas subject to flooding. The flood risk information presented on the FIRM is based on historic, meteorological, hydrologic and hydraulic data, as well as open-space conditions, flood control works, and development.

Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes Federally backed flood insurance available to homeowners, renters, and business owners in these communities. Community participation in the NFIP is voluntary.

Flood insurance is an insurance policy required by mortgage lenders or insurance companies on real property located within a floodplain or special flood hazard area (SFHA) as determined by FEMA. All property owners whose real property lies within a SFHA as determined by FEMA are required to have flood insurance.

Flood insurance is designed to provide an alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods. Flood damage is reduced by nearly $1 billion a year through communities implementing sound floodplain management requirements and property owners purchasing of flood insurance. Additionally, buildings constructed in compliance with NFIP building standards suffer approximately 80 percent less damage annually than those not built in compliance. And, every $3 paid in flood insurance claims saves $1 in disaster assistance payments.

In addition to providing flood insurance and reducing flood damages through floodplain management regulations, the NFIP identifies and maps the Nation's floodplains. Mapping flood hazards creates broad-based awareness of the flood hazards and provides the data needed for floodplain management programs and to actuarially rate new construction for flood insurance.

Additional information on flood insurance may be found at the website.

Community Rating System

The National Flood Insurance Program's (NFIP) Community Rating System (CRS) is a voluntary incentive program that recognizes and encourages community floodplain management activities that exceed the minimum NFIP requirements. As a result, flood insurance premium rates are discounted to reflect the reduced flood risk resulting from the community actions meeting the three goals of the CRS: (1) reduce flood losses; (2) facilitate accurate insurance rating; and (3) promote the awareness of flood insurance.

For CRS participating communities, flood insurance premium rates are discounted in increments of 5%; i.e., a Class 1 community would receive a 45% premium discount, while a Class 9 community would receive a 5% discount (a Class 10 is not participating in the CRS and receives no discount). The CRS classes for local communities are based on various creditable activities, organized under four categories: (i) Public Information, (ii) Mapping and Regulations, (iii) Flood Damage Reduction, and (iv) Flood Preparedness.