Fact Sheet: National Flood Insurance Program (NFIP)
Release Date: July 20, 2006
Release Number: 1651-009FactSheet
» More Information on Ohio Severe Storms, Tornadoes, Straight Line Winds, and Flooding
Here are some facts to should know about flood insurance:
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Homeowners, business owners and renters all can purchase flood insurance as long as their community participates in the NFIP.
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Residents do not have to live in a floodplain to buy flood insurance. In fact, more than 25 percent of flood insurance claims come from medium or low-risk flood areas.
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Flood insurance is available from any licensed insurance agent, or through NFIP by calling 1-800-427-4661.
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There is a 30-day waiting period from the time the premium is paid until the time the policy becomes effective.
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Compared to a fire, people in floodplains are four times more likely to have a flood during their 30-year mortgage.
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Flood insurance coverage is available for residential and business structures and contents. A single-family home can be insured for up to $250,000. An additional $100,000 can be purchased for contents. Commercial buildings can be insured for up to $500,000. Business contents can be covered for up to $500,000.
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Renters can purchase contents coverage for up to $100,000 to cover personal belongings.
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Home-based business owners need to purchase separate coverage for the business and/or contents. Coverage is not automatically included under a homeowner’s flood insurance policy, even if the business is located inside the home.
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A flood insurance policy reimburses individuals to certain limits for actions taken to prevent flood damage. These actions can include moving the insured contents to a safe place and/or the cost of purchasing sandbags, plastic sheeting, lumber, pumps, etc.
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Flood insurance claims are paid even if a federal disaster is not declared by the President.
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A flood insurance claim will reimburse individuals for covered losses and never has to be repaid, unlike a disaster assistance loan.
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Flood insurance claims are handled quickly so that flood victims can recover quickly.
- Flood insurance claims are paid by policyholders’ premiums, not tax dollars.
How do residents go about getting a flood insurance policy and what else do they need to know?
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First, contact local government officials to determine whether their community participates in the NFIP. If it does, they can buy flood insurance coverage. If it does not, they cannot buy coverage.
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Next, contact their insurance agent or the NFIP and tell them they would like more information about flood insurance. The agent should be able to tell them what is covered and how much their policy will cost.
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Or, visit Floodsmart.gov for information on determining your flood risk, finding an agent, or estimating your own premiums.
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The cost will be determined in part by whether they live in a floodplain, also known as Special Flood Hazard Area (SFHA). Their local building official(s) should have maps showing if there are SFHAs and where they are. Residents can determine whether they are in a low, medium or high-risk area by checking these maps.
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A flood insurance policy may also pay up to $30,000 to help pay the cost to comply with a floodplain ordinance if the home has been damaged by a flood, also known as Increased Cost of Compliance (ICC).
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Those who are located outside the floodplain may be able to get a Low-Cost Preferred Risk Policy. These policies offer fixed combinations of building and contents coverage at set prices.
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Another way to reduce their premium is through an elevation rating. If the lowest floor of their house is above the base flood elevation (predicted flood depth in their area), they can qualify for lower rates. Local officials can help them determine the base flood elevation for their home.
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On the other hand, if they live within a floodplain, their chances on getting flooded are higher – therefore the premium is higher.
Last Modified: Monday, 24-Jul-2006 08:14:59