Shopping for insurance can be confusing. Most people shop based on price, but choosing the right coverage and company are important, too.
Learn the Basics. It’s important to understand your options before you shop. See The Basics section to learn about flood insurance coverages.
Personal auto policies usually cover flood if you buy comprehensive (“other than collision”) coverage. For more info on shopping for a personal auto policy that includes flood coverage, visit our Auto Shopping Guide.
Most residential property policies do not have flood coverage. Ask your company or agent if they offer it. If they don’t, call FEMA’s NFIP Help Center at 1-800-427-4661 for help.
The Three C’s of Shopping:
Cost, Coverage, and Customize
Search online. The web is a good source of info. You can look for agents and companies, and read reviews.
Use the OPIC Policy Comparison Tool. This free tool allows you to filter for some companies that offer flood coverage for residential property.
Ask questions. When you talk to a company or agent, ask:
- Do you offer flood insurance?
- Is this an NFIP policy? (Some companies only offer NFIP policies.)
- Is this NFIP equivalent or better? If better, how? (For example, does it provide ALE coverage?)
- If it is not NFIP equivalent, what flood coverage does it provide?
- Is there a waiting period before coverage takes effect? *NFIP policies have a 30-day waiting period.
- What coverage will I have for my basement or crawlspace?
- What coverage will I have for electrical/plumbing systems and appliances located below my lowest elevated floor?
- When are losses paid at actual cash value (ACV) vs. replacement cost value (RCV)? For those paid on ACV basis, is RCV available?
- Will I have coverage for my electronics (laptops, tablets, TVs, smart phones, etc.)?
- Is coverage available for special items like jewelry, fine art, or guns?
- What deductible options do you offer?
- How much do the different deductibles change my payment?
- What discounts are available?
- Do I have to pay any fees not included in the quoted premium?
- What will my total payment be?
If a lienholder makes you buy flood insurance, it is likely only for your home, not your personal items. You may have to buy contents coverage separately.
This is a growing market. Most residential flood policies are FEMA’s NFIP policies, with limited options. More companies are starting to offer flood coverage through endorsements or separate policies that provide different levels of coverage like:
- Limited coverage (Ex: $10,000 for structure and contents)
- Coverage equal to NFIP
- Coverage for more than NFIP (Ex: ALE, higher limits, etc.)
- Excess coverage (Ex: You need $350,000 flood coverage for your home, but the NFIP limit is $250,000. You may be able to buy excess coverage for the $100,000 difference elsewhere.)
Other Things to Think About
- Most flood policies have a 30-day waiting period before coverage takes effect.
- If you do not own a home, you should still think about buying flood insurance. Your landlord’s flood insurance policy will not cover your personal items (contents).
- If you cannot live in your home because of flooding, you may be able to get ALE coverage.
- Flood policies can be: 1) an endorsement on your residential property policy; 2) a separate policy; 3) an NFIP policy; or 4) a policy through the surplus lines market. If you are considering a surplus lines policy, read our article, “What is Surplus Lines?” to understand this market.
More Terms to Know
Actual cash value (ACV) – the amount to replace or fix your home and personal items minus depreciation. Depreciation is a decrease in value for age, or wear and tear.
Claim – a request made to an insurance company to pay for damage or injury.
Coverage – the damage or injuries an insurance company agrees to pay for under the policy.
Deductible – the amount you owe in a loss before the company pays its part.
Flood – Flooding is a buildup or an overflow of water that covers or submerges land that is usually dry.
Flood Insurance – People buy flood insurance to insure the place they live, their automobile, and their personal items from damage caused by flood.
Policy – a contract between you and the insurance company. The policy tells you what’s covered and what the insurance company is required to pay.
Policy period – the period of time your policy provides coverage.
Premium – the amount you pay an insurance company for your policy.
Replacement cost value (RCV) – the amount to replace or fix your home and personal items.