Flood Insurance Basics

The National Flood Insurance Program (NFIP) is a federal program that was started in 1968. Congress created the program because insurance companies were reluctant to provide flood insurance for homeowners in flood zones. The Federal Emergency Management Agency (FEMA) and private insurers are in charge of the program.


Flood insurance generally provides coverage for the building and the property in the building. However, you can choose separate coverage amounts and deductibles. There may also be exceptions such as having the washers and dryers considered belongings, but dishwashers and refrigerators considered part of the building. Your rates for coverage will also be determined based on the characteristics of the home. This includes the height above sea level, and if you are in a flood zone.

Know Your Risk

If you are in a high-risk flood zone, then there is a pre-Flood Insurance Rate Map (FIRM) subsidized rate and the standard rate. Most states are part of the NFIP program, and the pre-FIRM subsidized rate is available for homes built before the start of FEMA.

This coverage is important because renters and homeowners insurance generally will not cover flood damage. Flood insurance is something that must be purchased separately. FEMA pays grants to some homeowners, but the assistance is little. Having official flood insurance is a better option than relying on a grant from FEMA.