05/18/2026
Why You Need Flood Insurance
Do you ever wonder whether you should worry about flooding? The answer is yes. You don’t have to live in a coastal area to be affected by flooding. Anyone who owns a home near a body of water, including lakes and streams, is vulnerable. In fact, more than 20% of flood claims come from properties outside high-risk flood zones, according to the Federal Emergency Management Agency (FEMA).
If your community is experiencing overbuilding, has an antiquated sewer system or gets severe weather, you’re also at an increased risk of flooding. Floods are the nation’s most common and costly type of natural disaster, causing millions of dollars in damage annually.
How can you lower your risk? While there's little you can do to prevent flooding, you can protect yourself with flood insurance. Flood insurance is critical because homeowners and renters policies typically do not cover flood damage.
A smart choice
According to FEMA, just 1 inch of water in your home could cost more than $27,000 in damages. When you consider the potential damage of a flood, the benefit of having flood insurance is well worth the cost. And your flood doesn't have to be declared a national disaster for your flood insurance to apply.
In the U.S., most flood policies are purchased through the government's National Flood Insurance Program (NFIP). NFIP was created when the National Flood Insurance Act of 1968 was passed. It provides affordable insurance to property owners, renters and businesses. It's designed to reduce the socioeconomic impact of disasters.
But NFIP isn't your only option. Many private insurance companies have entered the market in recent years, so it's possible to obtain private flood insurance. Some insurance companies offer greater coverage than NFIP does.
What the NFIP covers
NFIP policies cover damage due to:
*Overflow of inland or tidal water
*Unusual and rapid accumulation of water
*Runoff of surface waters from any source
*Mudflows
Simply put, NFIP covers direct physical damage to your home or your belongings due to a flood. For example, damage caused by a sewer backup is covered if the backup is a direct result of flooding. But if it’s caused by another problem, the damage is not covered.
How to buy flood insurance
To purchase flood insurance through the NFIP, contact your insurance professional. You can't buy flood insurance directly from the NFIP. Keep in mind that NFIP flood insurance rates don’t differ from company to company or agent to agent.
Here are 10 important questions to ask about flood insurance.
1. Does my community participate in the NFIP? Flood insurance from the NFIP is only available in participating communities, but most communities participate. Your insurance professional can tell you if your state and community participate.
2. Do I qualify for a Preferred Risk Policy? A Preferred Risk Policy is a Standard Flood Insurance Policy in the NFIP. It offers low-cost coverage to owners and tenants of eligible buildings located in certain moderate-risk zones.
3. What flood zone do I live in? What is my property's flood risk?
4. Is flood insurance mandatory for my property? Will the lender require it?
5. Will the federal government back my flood insurance policy?
6. How much coverage should I get for my home/building and belongings?
7. How can I reduce the cost of my flood insurance?
8. Are there additional expenses or agency fees?
9. Will my policy provide replacement cost value or actual cash value? Actual cash value is equal to the replacement cost minus any depreciation (ACV = replacement cost - depreciation).
10. Who should I call if I have a flood claim?
Your insurance professional is a valuable resource
When shopping around for flood insurance, your insurance professional can point you in the right direction. Flood insurance is essential if you live near a body of water. But even if you don’t, it’s still an important safeguard. Heavy rains, overbuilding and outdated sewer systems can make flooding a problem just about anywhere. Flood insurance is a smart option to protect against financial damage to your home and valuables.
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