What is Flood Insurance?

Homeowners, condo, renters, and commercial property insurance policies provide protection from lots of perils, but they also have exclusions that prevent certain incidents from being covered by the policies. Floods are one of the potential incidents that are often excluded from these insurance policies, which is why there’s flood insurance.

Flood policies give property owners, including both individuals and businesses that own property, access to protection from flooding. Flood coverage is widely available to homeowners, condo owners and businesses, and some insurance providers even offer flood policies for renters.

What Risks Does Flood Coverage Offer Protection Against?

Flood policies generally offer protection from unusual or abnormal water patterns. Floods are the most famous atypical water pattern, at least partly because they can cause a lot of damage in a short amount of time. Floods are just one example of unusual water pattern, though. Other abnormal patterns that a flood policy might cover are:

  • Erosion caused by especially strong waves
  • Mudflows and mudslides
  • Other patterns specifically noted in a policy’s paperwork

(Exact coverages can vary slightly from policy to policy.)

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Who Can Benefit from Having Flood Coverage?

Almost any person or entity that owns property can benefit from getting a flood policy to supplement their other property insurance policy.

In high-risk areas where flooding is common, property owners can scarcely afford to be without protection. In fact, people and businesses that have property in certain high-risk areas may even be required by law to carry a flood policy.

In areas that don’t flood as often, property owners often still can benefit from having flood coverage. Flood policies for properties in low-risk areas are usually affordable, and they can provide important protection if a flood ever does occur. After all, few individuals and businesses could afford to fully recover from a flood with just their financial resources.

Can Disaster Relief Funds Be Put Towards Repairing Flood Damage?

When they’re made available, disaster relief funds can generally be used to repair and restore property that was damaged in a flood. Property owners shouldn’t treat the disaster relief program as an insurance program, though.

To start with, the disaster relief program doesn’t provide grants for rebuilding after a natural disaster. The program instead offers no-interest loans. These loans don’t typically have interest rates, but the money borrowed must eventually be paid back.

Furthermore, these funds often aren’t available. They’re only accessible after the president declares a disaster to be a national disaster, and many floods are never acknowledged as such by the president.

While property owners may want to borrow money through the disaster relief program if funds are made available, it’s normally still wise to have flood coverage.

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How Can Property Owners Purchase Flood Policies Through the NFIP?

In order to purchase a flood policy through the National Flood Insurance Program (NFIP), people or businesses must own property in a community that participates with the program. The Federal Emergency Management Agency, which oversees the NFIP, maintains a comprehensive list of communities that participate in the program.

For property owners who are able to take advantage of the NFIP, the policies offered through this program are subsidized by the government. In most cases, they’re the most affordable flood policies available.

How Can People and Businesses Get Quotes for Flood Insurance?

For help getting quotes for flood insurance through the NFIP or private marketplace, individuals and businesses should contact an independent insurance agent who’s licensed in their state. A licensed agent will be able to find out whether a property owner qualifies for the NFIP, and an independent agent will be able to request quotes from multiple insurers if several policies are available to an individual or business that owns property.


Meet Your Industry Specialist

Jim Hickey

Mr. Hickey is a Partner and the President of Personal Lines. He was the President of Links Insurance Services, which he started in 2001. Jim grew Links Insurance to 40 employees by the time it became a division of World Insurance Associates in 2019.

Jim Hickey has been a top commercial and personal lines producer for the past 15 years and has guided the company to 18 years of year-over-year growth.

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