Why is Flood Insurance Required?

The Flood Disaster Protection Act requires the purchase of flood insurance to receive federal or federally-backed insurance for acquisition and/or construction of buildings in an SFHA. Homeowner's insurance does not cover flooding; therefore, a separate policy must be purchased.

Under the recently enacted National Flood Insurance Reform Act, the lender is legally responsible for determining if a flood insurance policy is required for a loan. Coverage may be purchased for both the building and its contents.  Residences can be insured for up to $250,000 for the building and $100,000 for the contents.  Because content coverage is separate, renters can also ensure their belongings up to the same amount. Non-residential buildings can be insured for up to $500,000 for the building and $50,000 for the contents. Since these figures can vary, check with your insurance company for further details.

If you are not in an SFHA and you wish to purchase flood insurance, a Preferred Risk Policy (PRP) is available at a discounted rate. Because these policies already have the lowest premium possible, the CRS discount will not apply. PRP Coverage limits may be $250,000 for the building and $60,000 for the contents.

Show All Answers

1. What is Flood Preparedness?
2. How to Obtain Floodplain Information
3. What is a Local Flood Hazard?
4. What is a CRS Discount?
5. Why is Flood Insurance Required?
6. How Can You Protect your Property?
7. What are the National Substantial Improvement Requirements?
8. Is there Financial Assistance for Property Protection?
9. What is Flood Warning System and Flood Mapping Information?
10. What is Drainage System Maintenance?
11. What is the Flood Safety Checklist?
12. Is there any additional disaster information?
13. What about Severe Storm or Flood Warnings?
14. What are the Flood Insurance Rate Zone Definitions?
15. What are the Flood Basics?
16. Do homeowner insurance policies cover damage from rising water?