How Does The National Flood Insurance Program Work?

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

Jason Metz Lead Editor, Insurance

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

Written By Jason Metz Lead Editor, Insurance

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

Jason Metz Lead Editor, Insurance

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.

Lead Editor, Insurance Les Masterson Deputy Editor, Insurance

Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.

Les Masterson Deputy Editor, Insurance

Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.

Les Masterson Deputy Editor, Insurance

Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.

Les Masterson Deputy Editor, Insurance

Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.

| Deputy Editor, Insurance

Updated: Jun 20, 2024, 6:20am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

How Does The National Flood Insurance Program Work?

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You may not think your home has a high risk of flooding, but 40% of National Flood Insurance Program (NFIP) claims come from outside high-risk flood zones, according to FEMA. And 99% of counties in the U.S. have experienced a flood.

Most residential flood insurance policies are sold through the NFIP. The NFIP was created by Congress in 1968 and is managed by FEMA. Nearly 23,000 communities participate in the NFIP and there are more than 4.7 million policies in force nationwide.

How Do I Know If I Need Flood Insurance?

If you have a federally backed mortgage and live in an area identified as a Special Flood Hazard Area (SFHA) within a participating NFIP community, you are required to have flood insurance, according to the Flood Disaster Protection Act of 1973.

Additionally, if you live in a high-risk flood area and have received federal disaster assistance, such as grants from FEMA or funds from the Disaster Loan Plan of the U.S. Small Business Administration, you are required to maintain flood insurance in order to be considered for any future federal disaster aid.

But even if you live outside of an SFHA, your mortgage lender might still require flood insurance. A standard homeowners insurance policy doesn’t cover flood insurance.

What Does the National Flood Insurance Program Cover?

FEMA flood insurance offers two types of coverage: building and contents (meaning your personal property). You can purchase a building-only coverage, a contents-only coverage or both.

NFIP flood insurance can be further broken down into two areas:

Coverage for Elevated Floors

NFIP flood insurance policies cover the building property (up to $250,000) including:

NFIP flood insurance policies cover contents (up to $100,000) including:

Coverage in Areas Below the Lowest Elevated Floor

FEMA flood insurance has limited coverage for building and contents in areas below the lowest elevated floors, such as a crawlspace or basement.

Building coverage for basements includes items such as:

Content coverage for basements includes items such as:

The following items are not insured under building or contents coverage if they are in an area below the lowest elevated floor:

What’s Not Covered by a NFIP Flood Insurance Policy?

The National Flood Insurance Program covers damage caused directly by a flood, defined by the NFIP as “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.”

Water damage from problems like a sewer backup will not be covered unless the backup is directly caused by a flood.

Here are items not covered by FEMA flood insurance:

How Do I Get FEMA Flood Insurance?

You can purchase a FEMA policy if you are a homeowner or renter and your property is located in a community that participates in the National Flood Insurance Program. You can contact your insurance agent and ask if your community participates or look it up in the National Flood Insurance Program Community Status Book.

You cannot purchase a flood insurance policy directly from the NFIP. You will need to purchase it through an insurance agent or company that participates in the NFIP. Call your home insurance agent to see if they can provide a flood insurance quote.

If you are not eligible to purchase a flood insurance policy from the NFIP, you can potentially buy flood insurance from a private insurance company. Here are some flood insurance options.

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Lead Editor, Insurance

As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others make well-informed decisions.

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