Even if you live in an area that has never experienced a flood before, flooding can still damage your home. While floods are usually caused by major events like hurricanes or overtopped levees, they can also be caused by outdated or clogged drainage systems and rapid accumulation of rainfall.

Most homeowners and property insurance policies do not provide coverage for flood damage.

Flood Insurance from the National Flood Insurance Program

The National Flood Insurance Program (NFIP) was created by Congress in 1968 to help property owners protect themselves from the financial devastation caused by floods. Flood insurance from the NFIP is available to homeowners, renters, condo owners and business owners.

The cost of flood insurance varies depending on the coverage you purchase and your property’s flood risk. The program determines the flood risk of a property by analyzing the history of floods in the area, as well as other factors such as typical rainfall, river flow and tidal surge data, topography, flood control measures and changes due to building and development. The data is used to create flood hazard maps that show the degree of risk for your community. The maps help determine the cost of flood insurance for your property; properties with a lower degree of risk will have lower premiums.

You can purchase NFIP flood insurance through your insurance agent and most leading insurance companies. Rates for flood insurance are pre-set and do not differ from company to company or agent to agent. Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance. Flood insurance is not required if you live in a moderate- to low-risk flood area, but it is strongly recommended because you can still be at risk for floods. If your community participates in the Community Rating System (CRS), you may qualify for an insurance premium discount of up to 45% in high-risk areas, and up to 10% in moderate to low-risk areas.

Land areas that are at a high risk for flooding are called Special Flood Hazard Areas, or floodplains. Properties that are located in a Non-Special Flood Hazard Area—or an area considered to be a moderate – to low-risk flood zone—may be eligible for a preferred rate.

If you apply for flood insurance from the NFIP, there will be a thirty-day waiting period after you have completed the application and made the first premium payment for the policy to become effective. In cases where flood insurance is required for you to obtain a mortgage loan, the thirty-day waiting period will be waived and the flood insurance will be effective on the loan closing date.

Floods Can Happen Anywhere

People who live outside of high-risk flood areas file over 20% of flood insurance claims and receive one-third of the disaster assistance allotted for flooding related disasters. Everyone should consider purchasing flood insurance. According to the NFIP:

We can work with you to determine the coverage options that are right for you and your property, and we can help you determine how much coverage you need. You can visit FloodSmart.gov (the website of the NFIP) to review flood maps and find out the flood risk and insurance requirements for your area. And you can take a flood risk profile to find out what type of risk area your property is in.