National Flood Insurance Program Information

Federal Emergency Management Agency

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National Flood Insurance Program Information

The majority of standard home owners insurance policies do not cover property in the event of flooding, but flooding is one of the most frequent hazards in America today . . . it seems like almost every day somebody, somewhere in America is at risk of losing their home and their property because of heavy rains, tropical storms, hurricanes or other types of flood.

The National Flood Insurance Program began in 1968, when Congress realized how important it was to help property owners to protect themselves and their homes financially against these flooding hazards.  They mandated lenders which were federally insured to regulated to have a legal requirement that flood insurance was taken out on properties which were located in areas of America which were classified as having a high risk of flooding. Anyone can have access to flood insurance, whether they own their home, rent or own business premises just so long as their local community is a participant in the NFIP. These participating communities take an active role in adopting and enforcing ordinances which either meet or exceed the requirements set by the Federal Emergency Management Agency, aimed of course at reducing the risk of flooding in the community.

Residents in High Risk Flood Zones are required to have adequate flood insurance by their lenders. High risk areas are those which are estimated to have at least a 1% chance of flooding over any given year. This might not sound to be very high, but if you think that over the 30 years of a standard mortgage period there’s a 26% chance that the property will flood before you’ve made the final mortgage payment . . . that sounds a bit of a different story doesn’t it?

Residents in Moderate to Low Risk Flood Zones do not need to have flood insurance by their federally insured or regulated lenders, but it is still highly recommended. Flooding is a danger in most States and just because you live in an area of moderate to low risk it certainly doesn’t guarantee that you won’t be the victim of flooding. The people who live in these areas actually file around 20% of the flood insurance claims and receive around a third of the disaster assistance available for flooded areas. Disaster assistance can be a great help, but ultimately it’s a low interest loan which must be repaid . . . flood insurance is definitely the better option.

Around 20,000 communities now participate in the NFIP helping their residents to help themselves both financially and physically against the hazards of flooding.

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