What is the deal with flood insurance?
May 31st, 2010
I heard that if you live on a flood plain, you cant get flood insurance. That makes no sense. Can someone break it down for me?
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May 31st, 2010
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Flood insurance is a federally administered program If you live in a flood zone (categorized by FEMA into 3 categories) you MUST purchase flood insurance if you have a mortgage. Check out http://www.floodsmart.gov for more information.
You’ve got it backwards. If you do NOT live in a flood plain, you cannot get flood insurance.
Which makes no sense. Car insurance companies LOVE to sell policies for cars that never get driven, and thus never have accidents. Why not sell flood insurance to people who are likely to *never* collect?
Not true. Most communities in flood plains, comply with what they have to do to be able to get flood insurance through National Flood Insurance Plan. NFIP is the ONLY way to get flood in the US – they set the rules, they set the rates – there’s NO competition.
EVERYONE, technically, is in a flood plain – whether it’s a 100 year flood plain (very high risk), 500 year flood plain (low risk) or heck, on the top of a mountain, every 50,000 years or so there will be a flood big enough to bring the mountain down. So you can get insurance through NFIP if you’re a high risk, or a low risk – or even if you think it’s no-risk (yes, there are floods in places NOT next to a river or ocean!!)
Talk to your homeowners agent to get a quote for flood.
I write flood insurance through Travelers. The policy and actual funding for the claims are through FEMA and Travelers is one of the companies that issues policies under the program. You can obtain coverage whether you live in a high risk area (flood plain) or not. Of course if you are in an area that is high risk the premium will be much higher whereas a low risk policy will have a much lower premium. You can visit an independent agent or visit Travelers web site at
http://www.travelers.com/personal/equote/flood/
Good Luck
First, everyone lives in a flood zone, it is just a matter of whether you are in a special hazard flood area or not. There is also now a special coastal barrier flood zone (I am no longer in a coastal state so I don’t know a whole lot about it). Now, MOST people can get flood insurance with the National Flood Insurance Plan (NFIP) IF their town participates (have to pass certain zoning & do culvert work, etc) and they are not in that special coastal barrier zone – forgive me, I don’t remember the exact name of it. The coastal zone exclusion is only for new policies, if there is one in existence, they can’t cancel it for rezoning the area. This is to keep people from building new houses in these areas that keep getting flooded.
If you are not in a coastal area but your town does not participate, you can get flood insurance with a surplus lines carrier like Lloyd’s of London, but you are going to pay big bucks for it.
Most floods happen inland, not on the coast & 25-30% of floods happen outside the special hazard flood areas, that is why many communities are remapping their flood areas. You can buy flood insurance at a much reduced rate (preferred rate) if you are not in the special hazard area as long as your town participates in NFIP.