Flood Insurance: The Right Choice 

NFIP Facts for Midwest Residents 

Recent large-scale floods across the Midwest have again demonstrated the 
devastation that flooding can cause 
– often with little or no warning. To help answer Midwest residents’ questions 
and concerns about the role of 
flood insurance and the National Flood Insurance Program in protecting against 
the financial consequences 
of flooding, FEMA provides the following important information. 

FLOOD INSURANCE NEEDS VS. REQUIREMENTS 

Most residents who have property in high-risk areas and have a mortgage from a 
federally regulated or insured lender are 
required to carry flood insurance. Those in low-to moderate-risk areas are not 
federally required to have flood insurance, 
although individual lenders may, as part of their own rules and regulations, 
require it. 

When it comes to flood insurance, “not required” is not the same thing as “not 
needed.” If you do not live in a high-risk 
area, or are not required to carry flood insurance as a condition of your 
mortgage, you should still consider flood insurance 
protection. In just moments, a flood can wipe out the personal and financial 
security that often takes years to build. Unfortunately, 
many Midwest residents do not have flood insurance. Currently, less than nine 
percent of residents in the 
high-risk areas in Iowa, Illinois, Indiana, Missouri and Wisconsin have flood 
coverage, and less than one percent of 
residents in these states’ low– to moderate-risk areas have flood insurance 
protection. 

In deciding whether you need flood insurance, here are some facts to keep in 
mind: 

§ Typically, homeowners insurance does not cover flooding and when federal aid 
is made available, it usually takes 

the form of a low-interest loan that individuals must repay in addition to their 
existing mortgage. For most 

property owners, flood insurance is the best way to protect against flood loss. 

§
• 
Flooding occurs in areas not subject to the federal flood insurance requirement. 
About a quarter of all flood claims 
come from areas where flood insurance is a choice rather than a requirement. 

§
• 
A few inches of flood water can cost thousands of dollars. And as the water 
rises, so too will the costs. In 2007, the 
average flood claim was around $24,000. 

§ 
Flood insurance is affordable. The average flood insurance policy costs around 
$500 a year. Residents outside the 
highest-risk areas can purchase a Preferred Risk Policy for around $119 a year. 

§ 
Homeowners can ensure their home for both the building and its contents. Up to 
$250,000 is available for the structure 
and up to $100,000 for its contents. 

§ 
Most everyone can purchase flood insurance* – including homeowners, business 
owners, condominium owners and 
associations, and renters. 

§ 
There is typically a 30-day waiting period before a policy takes effect – so 
don’t wait until the next storm comes to 
purchase a policy. 

§ 
If you live in the vicinity of a levee, it is important to remember that no 
levee provides full protection from flooding, 
and that flood insurance is strongly recommended. 


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*NOTE: If you have been told by anyone that you cannot purchase flood insurance 
in a community where it is offered, 
FEMA strongly recommends you seek a second opinion to verify that information. 
Most states require flood insurance training 
for licensed insurance agents. To locate an NFIP trained agent in your area, 
visit www.floodsmart.gov. If an agent 
provides flood insurance information that you believe to be erroneous, you can 
report the problem to your State Insurance 
Commissioner. 

FLOOD HAZARD MAPS: MAPPING THE RISKS 

Flooding is the most common natural hazard. For all NFIP communities, areas of 
high flood risk are shown on flood hazard 
maps, also known as Flood Insurance Rate Maps (FIRMs). The areas at high risk 
for flooding are known as Special Flood 
Hazard Areas or SFHAs. SFHAs are areas where there is a one percent chance of 
flooding in a given year – or a 26 percent 
chance of flooding over the life of a 30-year mortgage. Areas with a low-to 
moderate-risk are also indicated on the maps. 

By showing the extent to which areas of a community—and individual properties—
are at risk for flooding, flood maps help 
business and property owners make better financial decisions about protecting 
their property. Flood maps are also used to 
determine flood insurance rates and requirements. Many flood maps have recently 
been updated to reflect the current flood 
risks. If you have questions about your community’s flood map, contact your 
local officials. You can view your community’s 
current effective flood map at your building department or planning and zoning 
office. 

RAISING FLOOD RISK AWARENESS 

To help ensure that individuals understand their flood risk, and know that flood 
insurance is available, affordable and 
strongly recommended, the NFIP established the FloodSmart campaign. FloodSmart 
utilizes a range of different media— 
including a consumer-facing website—to encourage individuals to closely examine 
their individual flood risk, talk to their 
insurance agent and obtain proper flood insurance protection. Through 
FloodSmart, the NFIP also makes materials and information 
available to residents year-round – with a special focus on seasons during which 
flooding is a heightened risk in 
certain areas of the country, such as Spring Flooding in the Midwest. 

NFIP PARTICIPATION AND PROTECTION 

The National Flood Insurance Program (NFIP) lessens the financial devastation 
from flooding by enabling homeowners, 
business owners and renters in more than 20,400 communities across the country 
to purchase federally-backed flood insurance. 
In order to participate, communities must agree to adopt and enforce floodplain 
management measures. 

NFIP flood insurance is sold through about 90 insurance companies and thousands 
of agents. A vast majority of communities 
across the country have chosen to participate in the NFIP. Individuals with 
properties in participating NFIP communities, 
whether they are located inside or outside of a floodplain, are eligible for 
flood insurance protection. Those who do not 
live in a participating NFIP community may ask their agent about the 
availability of flood insurance through private insurance 
companies. 

FOR MORE INFORMATION: 

§
• 
Visit FloodSmart.gov or call 1-800-427-2419 to learn how to prepare for floods, 
how to purchase a flood insurance policy 
and what the benefits are of protecting your home or property investment against 
flooding. 

§ Contact your insurance agent to help you decide what kind of flood insurance 
protection is best for you. 

§
• 
To apply for federal disaster assistance in areas recently affected by flooding, 
visit www.FEMA.gov or call 1-800-621FEMA 
(3362) or 1-800-462-7585 (TTY). 

§
• 
If you live in a community that does not participate in the NFIP, talk with your 
local officials about joining the NFIP so 
that Federal flood insurance can become available. 


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