Mortgage Basics

Flood Insurance Guide

A comprehensive guide to flood insurance guide from NMHL mortgage experts.

NMHL Editorial Team2026-02-188 min read

<p>Flood insurance is a type of insurance that protects your home and personal belongings against damage caused by flooding. It's essential to understand that standard homeowners' insurance policies typically do not cover flood damage, which is why a separate flood insurance policy is necessary. The NFIP is the primary source of flood insurance for homeowners, and it provides coverage for up to $250,000 for the building and $100,000 for personal property.</p><p>There are two types of flood insurance policies: <strong>Building Property</strong> and <strong>Personal Property</strong>. Building Property coverage includes the physical structure of your home, including the foundation, walls, and roof, as well as permanent fixtures like plumbing, heating, and air conditioning systems. Personal Property coverage includes your personal belongings, such as furniture, appliances, and clothing.</p>

<p>Flood insurance is not just for homeowners living in high-risk flood areas. According to FEMA, <strong>25% of all flood claims come from moderate- to low-risk areas</strong>. If you're a homeowner, it's essential to consider purchasing flood insurance, regardless of your location. Even if you're not required to have flood insurance by your lender, it's still a good idea to purchase a policy to protect your investment.</p><p>Some homeowners may be required to purchase flood insurance as a condition of their mortgage. This is typically the case for homes located in high-risk flood areas, also known as <strong>Special Flood Hazard Areas (SFHAs)</strong>. If you're purchasing a home in an SFHA, your lender will likely require you to purchase flood insurance to secure the loan.</p>

<p>To determine if you need flood insurance, you'll need to assess the flood risk of your area. You can start by checking the <strong>Flood Map Service Center</strong> website, which provides information on flood hazard areas across the United States. You can also contact your local government or a flood insurance agent to determine the flood risk of your area.</p><p>If you're purchasing a home, your lender may require a <strong>flood determination</strong> to determine if the property is located in an SFHA. A flood determination is a report that indicates whether a property is located in a flood hazard area and if flood insurance is required.</p>

<p>There are several ways to get flood insurance, including through the NFIP and private insurance companies. The NFIP provides flood insurance to homeowners, renters, and businesses, and it's available to anyone living in a participating community. You can purchase an NFIP policy through a licensed insurance agent or broker.</p><p>Private flood insurance is also available through insurance companies like <strong>NMHL</strong>. Private flood insurance policies may offer more comprehensive coverage than NFIP policies, including additional coverage for personal property and temporary housing expenses.</p>

<p>The cost of flood insurance varies depending on several factors, including the location of the property, the value of the property, and the level of coverage chosen. The average cost of a flood insurance policy is around $700 per year, according to FEMA. However, the cost can range from a few hundred dollars to several thousand dollars per year.</p><p>It's essential to understand what's covered under a flood insurance policy and what's not. A standard flood insurance policy typically covers damage to the building and personal property caused by flooding. However, it may not cover additional expenses, such as temporary housing costs or debris removal.</p>

<p>Flood insurance can play a significant role in the mortgage process. If you're purchasing a home in an SFHA, your lender may require you to purchase flood insurance to secure the loan. In some cases, the lender may also require you to pay for a flood determination to determine the flood risk of the property.</p><p>At NMHL, we recommend that all homeowners consider purchasing flood insurance, even if it's not required by their lender. Our <strong>NMHL pre-approval</strong> process can help you determine if flood insurance is required for your specific situation and provide guidance on how to navigate the process.</p>

<p>In conclusion, flood insurance is an essential component of homeownership, and it's crucial to understand the basics of flood insurance to make informed decisions. By following the steps outlined in this guide, you can determine if you need flood insurance, how to get it, and what to expect from the process. At NMHL, we're committed to helping homeowners navigate the complex world of flood insurance and providing expert guidance every step of the way.</p>

<p>For more information on flood insurance, we recommend visiting the <strong>NFIP website</strong> or contacting a licensed insurance agent or broker. You can also contact NMHL to learn more about our flood insurance programs and how we can help you navigate the process.</p>
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Frequently Asked Questions

The National Flood Insurance Program (NFIP) is a federal program that provides flood insurance to homeowners, renters, and businesses. The NFIP is administered by the Federal Emergency Management Agency (FEMA) and provides coverage for up to $250,000 for the building and $100,000 for personal property.

Yes, it's still a good idea to consider purchasing flood insurance, even if you're not in a high-risk flood area. According to FEMA, 25% of all flood claims come from moderate- to low-risk areas. Flood insurance can provide peace of mind and protect your investment in the event of a flood.

To determine if you need flood insurance, you'll need to assess the flood risk of your area. You can start by checking the Flood Map Service Center website, which provides information on flood hazard areas across the United States. You can also contact your local government or a flood insurance agent to determine the flood risk of your area.

The National Flood Insurance Program (NFIP) provides flood insurance to homeowners, renters, and businesses, and it's available to anyone living in a participating community. Private flood insurance, on the other hand, is offered by insurance companies and may provide more comprehensive coverage than NFIP policies, including additional coverage for personal property and temporary housing expenses.

The cost of flood insurance varies depending on several factors, including the location of the property, the value of the property, and the level of coverage chosen. The average cost of a flood insurance policy is around $700 per year, according to FEMA. However, the cost can range from a few hundred dollars to several thousand dollars per year.

Yes, there are several ways to get a discount on your flood insurance premium. For example, if you're purchasing a new home, you may be eligible for a discount if you're purchasing a policy within a certain timeframe. You can also consider elevating your home or implementing other flood mitigation measures to reduce your premium.

If you need to file a flood insurance claim, you should contact your insurance agent or broker as soon as possible. They will guide you through the process and help you gather the necessary documentation to support your claim. You can also contact the NFIP or your private insurance company directly to report a claim and initiate the claims process.

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