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Myths & Facts About The National Flood Insurance Program

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Overview of the National Flood Insurance Program (NFIP)

The document serves as a guide to clarify common misconceptions about flood insurance, emphasizing that everyone in participating communities can buy it. It highlights that over 20,000 communities nationwide participate in the NFIP.

Key Myths and Facts

Eligibility and Availability

  • Myth: You cannot buy flood insurance if you live in a high-risk area.
    • Fact: You can buy it anywhere your community participates in the NFIP, except in Coastal Barrier Resources System (CBRS) areas.
  • Myth: Only residents of high-risk areas need insurance.
    • Fact: All areas are susceptible to flooding. Between 20% and 25% of claims come from outside high-risk areas. Low-to-moderate risk residents are advised to get coverage, potentially through the "Preferred Risk Policy."
  • Myth: You cannot buy insurance immediately before or during a flood.
    • Fact: There is typically a 30-day waiting period after payment, with exceptions for loans or map revisions.
  • Myth: You cannot buy insurance if your property has already been flooded.
    • Fact: You are still eligible to purchase coverage after a flood, provided your community participates in the NFIP.
  • Myth: Insurance is only available through the NFIP directly.
    • Fact: It is sold through private insurance companies and agents, backed by the federal government.

Coverage Details

  • Myth: Homeowners insurance covers flooding.
    • Fact: Standard policies do not cover flood damage; a separate NFIP policy is required.
  • Myth: The NFIP does not cover hurricanes or river overflow.
    • Fact: It covers flooding defined as a general/temporary condition where normally dry land is inundated. Causes include tidal overflow, heavy rainfall, mudflows, or wave erosion.
  • Myth: The NFIP does not offer basement coverage.
    • Fact: It covers basements (areas below ground level on all sides). Coverage includes structural elements, essential equipment, sump pumps, and water tanks. It does not cover finished walls/floors or personal belongings kept in basements.
  • Myth: The NFIP encourages coastal development.
    • Fact: A primary objective is to guide development away from high-risk areas. The Coastal Barrier Resources Act (CBRA) of 1982 prohibits federal financial assistance (including flood insurance) in designated CBRA areas.

Financial Assistance and Costs

  • Myth: Federal disaster assistance will pay for flood damage.
    • Fact: Federal declarations are issued in less than 50% of flood events. NFIP premiums average just over $400/year, which may be cheaper than federal disaster loans. Uninsured recipients of federal aid must purchase flood insurance to remain eligible for future relief.

Coverage Limits

  • Residential: Up to $250,000 for building coverage and $100,000 for contents.
  • Commercial: Up to $500,000 for building coverage and $500,000 for contents.

Contact Information

For more information or agent referrals:

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