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Since standard homeowners insurance doesn't cover flooding, it's important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the U.S. In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer funded disaster relief for flood victims and the increasing amount of damage caused by floods. The Mitigation Division a component of the Federal Emergency Management Agency (FEMA) manages the NFIP, and oversees the floodplain management and mapping components of the Program. 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. Flood damage is reduced by nearly $1 billion a year through partnerships with communities, the insurance industry, and the lending industry. Further, 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. The NFIP is self-supporting for the average historical loss year, which means that operating expenses and flood insurance claims are not paid for by the taxpayer, but through premiums collected for flood insurance policies. The Program has borrowing authority from the U.S. Treasury for times when losses are heavy, however, these loans are paid back with interest. Flood Insurance Rate Map also available.
Flood Insurance Quote
Flood Insurance Update
The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA), which works closely with nearly 90 private insurance companies to offer flood insurance to property owners and renters. In order to qualify for flood insurance, a community must join the NFIP and agree to enforce sound floodplain management standards.
The NFIP, a federal program, offers flood insurance, which can be purchased through property and casualty insurance agents. Rates are set and do not differ from company to company or agent to agent. These rates depend on many factors, which include the date and type of construction of your home, along with your buildings level of risk.
The two most common reimbursement methods for flood claims are : Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to within 80% of the buildings replacement cost. All other buildings and personal property (i.e. contents) are valued at ACV. The ACV is the RCV at the time of loss minus physical depreciation. Personal property is always valued using the ACV.
Building Versus Contents Coverage
Flood insurance protects two types of insurable property: building and contents. The first covers your building, the latter covers your possessions; neither covers the land they occupy.
Building coverage includes:
Buying flood insurance can provide protection and peace of mind. Flooding is one of the most common natural hazards in the United States. State and federal officials want to ensure that all Indiana residents are aware of the benefits of the National Flood Insurance Program (NFIP).
Below are some common myths and misconceptions about flood insurance.
Myth: Only homeowners can purchase flood insurance.FACT: Most homeowners, condo unit owners, renters, and businesses in NFIP participating communities can purchase flood insurance. To find out if your community participates, go to www.floodsmart.gov or contact a community official or insurance agent. The maximum coverage amounts are:
Condominium unit owners: up to $250,000 in structural coverage and up to $100,000 in contents coverage
Renters: up to $100,000 in contents coverage
Businesses: up to $500,000 in commercial structural coverage and up to $500,000 in contents coverage
Myth: You can't buy flood insurance if you are located in a high-flood-risk area.FACT: You can buy National Flood Insurance no matter where you live, as long as your community participates in the NFIP. The NFIP was created in 1968 to make federally backed flood insurance available to property owners, renters, and businesses in participating communities.
Myth: If you live in an unmapped area, you don't need flood insurance.FACT: Even areas in unmapped flood zones are susceptible to flooding, although to varying degrees. If you live in a high risk flood zone, it is advisable to have flood insurance. However, between 20 and 25 percent of the NFIP's claims come from low to medium risk flood zones. Residential and commercial property owners located in the lower risk zones should ask their insurance agents if they are eligible for the Preferred Risk Policy, which provides very inexpensive flood insurance protection.
Myth: You can't buy flood insurance if your property has been flooded before.FACT: You are still eligible to purchase a flood insurance policy after your home, condo, apartment, or business has been flooded, provided that your community is participating in the NFIP.
Myth: Homeowners insurance policies cover flooding.FACT: Unfortunately, many home and business owners do not find out until it is too late that their homeowners and business insurance policies do not cover flooding. The NFIP offers a separate policy that protects the single most important financial asset, which for most people is their home or business. Homeowners can include contents coverage in their NFIP policy. Residential and commercial renters can purchase flood insurance coverage for their buildings and contents/inventory and, by doing so, protect their livelihood.
Myth: Federal disaster assistance will pay for flood damage.FACT: Before a community is eligible for disaster assistance, it must be declared a federal disaster area. Federal disaster assistance declarations are issued in fewer than 50 percent of flooding events. Furthermore, if you are uninsured and receive federal disaster assistance after a flood, you must purchase flood insurance to remain eligible for future disaster relief. Disaster assistance does not cover as much as flood insurance, and flood insurance claims can be paid very rapidly after the event.
Myth: You can't buy flood insurance immediately before or during a flood.FACT: You can purchase National Flood Insurance at any time. There is usually a 30-day waiting period after you buy flood insurance before the policy is effective. In most cases, the policy does not cover a "loss in progress," which is defined as a loss occurring as of midnight on the first day your policy goes into effect. Basically, if you buy flood insurance after a flood, it will not cover your past losses, only losses after the policy goes into effect. New or refinanced mortgages are exempt from the 30-day waiting period.
Myth: The NFIP does not offer basement coverage.FACT: While basement improvements such as finished walls and floors, and personal belongings in a basement are not covered by flood insurance, structural elements and essential equipment within a basement are. The following items are covered under building coverage, as long as they are connected to a power source, if required, and installed in their functioning location:
More information on flood insurance is available on the Internet at www.floodsmart.gov, or by calling toll-free 1-888-275-6347 or TTY 1-800-427-5593 for the speech- and hearing-impaired.
FEMA leads and supports the nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation, to reduce the loss of life and property and protect the nation from all hazards including natural disasters, acts of terrorism, and other man-made disasters.