Flood Insurance FAQs
How do insurance companies define a flood? Is all water or moisture damage covered by flood insurance, or does there have to be an actual flood?
A flood is defined by the NFIP (National Flood Insurance Program) as “a general and temporary condition where two or more acres of normally dry land OR two or more properties are inundated by water or mudflow.” Additionally, a flood can be defined as water that arises from the ground and damages more than one property in a neighborhood. For instance, if a storm causes a gutter to blow off your house and water pools along your foundation before entering your basement, it would not be defined as a flood and damages would not be covered by your homeowner’s or your flood policy. Standing water flood damage, such as a lake or reservoir overflow, is typically covered by flood insurance.
Is flood damage covered by “regular” homeowner’s or business insurance?
Damage from flooding is typically not covered by home or commercial property insurance policies. Flood coverage is generally excluded on these policies. Water that backs up through a drain or sump pump from outside the building typically requires sump overflow coverage, which is an add-on available on most property insurance policies.
Do some properties require flood insurance, and how do I know if I own one of them?
FEMA and the Army Corps of Engineers maintain flood maps throughout the United States. These maps provide a designation for all properties as to whether they are in a flood zone, with determinations made using historical flooding and local topographical data. Properties designated A or V indicate they flood more than once every 100 years. Properties designated B, C, or X-shade zones are regarded as properties that will flood on average once every 100-500 years. An X zone-indicated property will flood less than once every 500 years. You can visit https://www.fema.gov/flood-maps to check if your home is in a designated flood zone.
If your property has a mortgage in an A or V zone, your lender will require you to purchase flood insurance, and they will determine the amount of coverage and the deductible. It can be difficult for a layperson to determine if flood insurance is required for a property using FEMAs tools, and insurance agents typically have more incisive rating systems to assess whether a property is in a flood zone.
If I’m not in a designated flood zone, should I still get flood insurance for my home or business?
As recent storms have increased in both frequency and severity of rainfall, we are seeing all zone designations, even those buildings in X flood zones, incurring damage. We recommend that every property owner consider purchasing flood coverage.
Who provides flood insurance?
The NFIP is administered by FEMA and will insure any building regardless of its zone status, as long as the residing community participates in the program. The township administrative office can tell you if your property is located in a participating community. The NFIP released an updated and more granular pricing system in October of 2021. Even buildings located in X zones are often experiencing damage, and as a result, pricing has increased.
There are also numerous private flood insurance companies which can offer better pricing, but these companies can deny coverage based on zone status and other factors.
Is it better to get flood insurance through FEMA or a private company?
In our experience, there is a tradeoff between FEMA and private policies. FEMA policies tend to provide less overall coverage and features than private companies, and can be more expensive. However, responsiveness to claims tends to be better with FEMA-based insurance, and their adjusters are typically more helpful than those from private companies. There has been a trend in the insurance industry to make pricing for personal insurance more individualized, and FEMA has introduced this concept into their new pricing model.
It is best to speak with an experienced agent to understand your options and what tradeoffs there are between flooding, water backup, and other types of water-related claims, and to help decide what is best for you.
If my home or business has been flooded in the past, will I still be eligible for flood insurance?
It depends on your property’s designation. A “repetitive loss property,” defined as a property that has had two or more flood claims greater than $1,000 within any prior 10-year rolling period, can purchase coverage directly from the NFIP. A “severe repetitive loss property,” defined as those that have had four or more flood claims over $5,000, might have access to federal and state funds to mitigate further loss by lifting the home or, in extreme cases, purchasing the property and demolishing the structure. If you are unsure, it’s best to contact your agent for clarification.
What about county, state or federal disaster assistance? Can’t I just rely on them if I get flood damage?
Not all weather events will trigger government assistance, so it would not be wise to rely on this as a primary source of financial support to cover your damage.
If I qualify for compensation through my FEMA or private flood coverage, how long does it generally take to get a check?
It is not possible to provide a specific timeframe, as each claim will be affected by the severity of the event (how many other claims there are in your area), accessibility to the area, availability of claims personnel, and how quickly you, as a customer, return all required proof-of-loss documents.
How do I know how much flood coverage to purchase, and what is the maximum it will pay out?
Depending on the type of property, a standard FEMA flood insurance policy offers a maximum of $250,000 in building coverage and $100,000 in contents coverage. Excess flood policies from both FEMA and third-party companies can be obtained or “stacked” as additional flood coverage over the primary policy. For a home, there is a maximum of $250,000 in building coverage, and for a commercial property, a maximum of $500,000. A private flood policy can offer higher limits. If you have a mortgage, the mortgage company will have requirements of how much coverage to carry and how high a deductible is permissible.
If my car is damaged or totaled by water, is that covered by my auto policy, or do I need flood insurance for that?
Flood damage to your auto would be covered under the comprehensive physical coverage portion of your auto insurance policy.
If I file a claim due to water or flood damage, will an adjuster come out and inspect my property?
It is customary for an adjuster to inspect your property to assess the damage and prepare an estimate for repairs.
If my property is uninhabitable due to damage, will flood insurance pay for a hotel or other short-term housing?
The FEMA flood insurance policy does not cover costs related to temporary relocation. Some private flood policies may offer limited coverage for these expenses.
I live in an apartment and have renter’s insurance. Should I still consider a separate flood policy?
If your apartment is in a designated flood zone and at ground level, you should consider purchasing flood insurance to protect your contents.
If I rent, and the owner has flood insurance, will it cover damage to my property?
No. The owner’s policy will not cover damages for the renter.
Please call or text our agents at 973-284-1083 if we can answer any further questions or provide more clarification. For a quick quote, call us or fill out our online form.
By Colleen Woods-Esposito
