How to buy flood insurance

Flood insurance is available through the National Flood Insurance Program or private flood insurance companies. You can typically get flood insurance from the same company that insures your home.

Pat Howard 1600Kara McGinley

By

Pat Howard

Pat Howard

Property and Casualty Insurance Expert

Pat Howard is a senior editor at Policygenius specializing in property and casualty insurance. His work has been featured on Property Casualty 360, Fatherly, MarketWatch, and more.

&

Kara McGinley

Kara McGinley

Property and Casualty Insurance Expert

Kara McGinley is an insurance editor at Policygenius, specializing in home, auto, and renters insurance. She's been writing about insurance since 2019, and her work and insights have been referenced in Kiplinger and WRAL.com.

Updated December 4, 2020|5 min read

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Homeowners insurance doesn’t cover water damage caused by flooding, so if you live in an area that is prone to flooding, you should consider flood insurance to ensure your home and personal belongings are fully protected.

Buying flood insurance coverage is fairly simple; there’s a good chance the company that insures your home sells it, and sometimes it’s offered as a coverage add-on to an existing homeowners insurance policy. But in many cases, you’ll have to buy standalone flood insurance either through your homeowners insurance company or a separate company.

Key Takeaways

  • Flood insurance is available through both the National Flood Insurance Program and private flood insurance companies

  • You can typically buy flood insurance through the same company that insures your home

  • If you live in a high-risk flood zone, you may be required to buy flood insurance

Where do I buy flood insurance?

Most flood insurance that you buy is funded and serviced by the federal government but sold by insurance companies. That makes it different than homeowners insurance, which is underwritten, funded, and serviced by insurance companies exclusively.

With flood insurance, you have a couple options for insuring your home against flood damage:

  • You can purchase a National Flood Insurance Program (NFIP) policy, which is managed by the Federal Emergency Management Agency (FEMA) but sold by private insurers. (NFIP flood insurance makes up around 95% of the industry market share.)

  • Private flood insurance, which is underwritten and funded by private insurance companies. Private flood insurance tends to have higher coverage limits and more comprehensive protection than the NFIP policy

How to buy FEMA flood insurance

The National Flood Insurance Program provides flood insurance that is financially backed by the federal government and sold by private insurance companies. To get an NFIP flood policy, your home needs to be located in a community that participates in the National Flood Insurance Program. According to FEMA, most communities participate in the NFIP.

There are a few things you need to do before you purchase an NFIP policy.

Find out what flood zone you live in

The first thing you should do is find out whether you live in a high-risk or moderate- to low-risk flood zone. You can check what flood zone you’re in by consulting the FEMA flood map. If the map reads like ancient Greek to you, a FEMA map specialist can help you determine what zone you’re in. Contact information for map specialists is available through the FEMA website.

If you live in a high-risk flood zone, or Special Flood Hazard Area and have a mortgage on your home, your lender will most likely require flood protection throughout the mortgage term.

If it’s determined that you live in a moderate- to low-risk flood zone, you’ll likely be eligible for a Preferred Risk Policy through the NFIP. A Preferred Risk Policy is essentially discounted flood coverage that can cost as little as $250 a year.

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Determine how much coverage you need

Check with your lender to see how much coverage you need. Most lenders will require enough flood insurance to cover your remaining mortgage balance, but you may want to consider additional coverage if you live in a high-risk community.

Find an NFIP flood insurance provider

If you live in one of the NFIP’s 23,000 participating communities, you get flood insurance through one of the NFIP’s “Write Your Own” (WYO) companies. Currently, 60 insurance companies participate in the NFIP’s WYO program.

The WYO program essentially allows private insurers to sell and put their branding on NFIP policies. You can check to see if your insurance company participates in the WYO program here. If you need help finding a flood insurance provider, the NFIP has a tool on their website to help you find providers in your area.

Get an elevation certificate

If you live in a high-risk flood zone and you’re getting flood insurance through the NFIP, you’ll be required to get an elevation certificate. An elevation certificate is a six-page document that details your home’s flood risk, and the NFIP will use the information contained in the certificate to determine your flood insurance rates.

In some cases, elevation certificates can lower your rates. For example, if you have a decades-old elevation certificate attached to the home and it recently underwent a renovation or flood retrofitting to raise the home above the base flood elevation (BFE), getting a new elevation certificate to reflect the home’s new decreased flood risk could lower your rates.

A home elevated three feet above the BFE can lower your flood insurance premiums by as much as 60%, according to FEMA.

How to buy private flood insurance

Private flood insurance has been increasing in popularity in recent years. As of 2018, 124 insurers offer private flood insurance, according to the Insurance Journal. One reason you may want to buy private flood insurance instead of NFIP coverage is because the policies are often better in quality.

Private flood insurance typically offers higher coverage limits and additional protection that you can’t get with an NFIP plan. Additionally, you don’t need an elevation certificate to get private flood insurance. (However many insurers provide discounts on your insurance premiums if you get an EC.)

There are a few caveats, though. Private flood insurance isn’t as widely available, and insurance companies can drop you from your policy mid-term or choose not to renew your policy if you’re deemed too high-risk. With NFIP flood insurance, you don’t have to worry about getting dropped from your policy.

Learn more about the differences between NFIP and private flood insurance here.

Do I have to buy flood insurance?

Whether or not you are required to buy flood insurance depends on the specifics of your mortgage and the location of your home. If you live in a designated high-risk flood area and have a government-backed mortgage, you will be required to buy flood insurance.

Even if your mortgage isn’t government-backed, your lender will likely require you to purchase flood insurance if your home is at-risk, like if you live along the coast.

How much flood insurance should I buy?

When setting your flood insurance coverage amounts, you should ask yourself two questions:

  • How much coverage do I need for my home?

  • How much coverage do I need for my personal belongings inside of my home?

If you already have homeowners insurance, you could simply apply the coverage amounts in that policy to your flood insurance policy. But keep in mind that a home with a replacement cost of $400,000 won’t be fully covered by NFIP flood insurance, because building coverage is capped at $250,000 with NFIP policies.

Since the building coverage maximum is $250,000 with NFIP insurance, that’d give you a $150,000 gap in coverage, leaving you either underinsured or in need of filling that gap with an excess flood insurance policy. You’ll want to be sure that you protect as much of your property as possible, provided that you can work it into your budget.

If you’re looking to buy extra coverage for flood damage, but not a standalone flood insurance policy, you should contact your homeowners insurance company. You may be able to add a flood endorsement to your homeowners policy, however keep in mind that endorsements may not offer as robust of coverage as a standalone policy.

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