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All About Flood Insurance

By April 7, 2021September 29th, 2021Flood

Here are three facts you need to know about floods and flood insurance:

  1. Ninety percent of the natural disasters that occur in the United States involve flooding.
  2. Flood damage often strikes in low or moderate-risk areas.
  3. Standard homeowners insurance does not cover flooding.

Now that you are armed with this information, deciding whether or not to purchase flood insurance might be a bit easier. Your financial future requires serious consideration of this coverage. Having protection from the floods associated with hurricanes, tropical storms, and heavy rains that can hit any part of the United States is essential. Below you will learn all about flood insurance.

What is flood insurance?

In 1968, the U.S. Congress created the National Flood Insurance Program (NFIP) to provide property owners, renters, and business owners with a way to protect themselves financially. Communities that participate in the program agree to adopt and enforce floodplain management ordinances. These ordinances must meet or exceed the Federal Emergency Management Agency (FEMA) requirements for reducing the risk of flooding.

The NFIP, administered by FEMA, works with about ninety private insurance firms to offer flood insurance to homeowners and renters. Flood insurance rates are set by the government and do not vary from company to company. These rates depend on numerous factors, including the home’s construction, the date it was built, and its risk level.

What is your risk of flood damage or loss?

As mentioned earlier, ninety percent of the natural disasters in the U.S. involve some flooding. According to FEMA, flash floods, inland flooding, and floods from seasonal storms happen in every region of the country.

Before you move into a new home, find out from your mortgage lender or your insurance agent if the area has been known to flood. You can also check with NFIP for flood risk information.

Just remember that you do not have to live in an area that is at high risk for floods to be in some danger from them. Approximately 20 to 25 percent of flood claims come from outside of high-risk areas. That means that practically everyone should know how to prepare for a flood, understand their flood insurance options, and purchase sufficient coverage.

Where can I purchase flood insurance?

You can purchase it directly from a reliable and trusted insurance provider or advisor. Companies such as White Cloud Insurance have accumulated many years of experience in providing flood insurance guidance, as they represent the highest number of reputable companies in the industry. Since homeowners insurance does not cover flooding, you will need a separate policy for it. Remember that flood coverage is recommended whether or not you live in a high flood risk area.

What is the flood insurance waiting period?

Flood insurance requires a 30-day waiting period—all the more reason not to wait until the last minute to decide on it.

What does flood insurance not cover?

NFIP flood insurance is a supplementary policy and does not have many benefits beyond repairs for flood damage. Here are a few examples of additional services that are not covered under an NFIP policy:

  • Temporary housing and additional living expenses during flood repairs
  • Sewer back-up (unless caused by flooding)
  • Flood damage to outdoor property like decks and swimming pools
  • Personal property in the basement

While flood insurance covers buildings for replacement cost, you should also be aware that coverage for personal property is available on an actual cash value basis only.

How much does flood insurance cost?

The average cost of flood insurance through the NFIP was $700 in 2019. If you live in a low-risk area, you may qualify for Preferred Risk Policies (PRP) with premiums starting at $325 per year. Those with properties in high-risk areas and flood zones will pay the highest premiums. Renters can purchase flood insurance, starting at $99 per year.

Are there coverage limits on flood insurance?

The maximum flood insurance coverage amount is $250,000 for the home and $100,000 for personal property. However, suppose the NFIP policy maximums are inadequate to cover your assets. In that case, some private insurers offer excess flood policies, which protect homeowners beyond the coverage provided by the NFIP policies.

Do you have questions about flood insurance?

The insurance advisors at White Cloud Insurance are always here to answer your questions. We can help you with flood insurance or a comprehensive homeowners insurance policy—all with competitive premiums. Use the convenient contact form, call us at 305-556-1488, or send us a message at to get started.