Flood Insurance Fact Sheet

NFIP Facts

You may be required to have flood insurance.  Congress has mandated federally regulated or insured lenders to require flood insurance on mortgaged properties that are located in areas at high risk of flooding.  But even if your property is not in a high risk flood area, your mortgage lender may still require you to have flood insurance.

The damage from just one inch of water can cost more than $20,000.

Storms are not the only cause of floods. Flooding can be caused by dams or levees breaking, new development changing how water flows above and below ground, snowmelt and much more.

FEMA Releases New Flood Insurance Resources

May 2022

NFIP has changed the way it determines flood risk and prices flood insurance.

If a property owner doesn’t know their flood risk, they cannot know their premium rate or what mitigation actions to consider.

As FEMA rolled out the National Flood Insurance Program’s new rating system, Risk Rating 2.0: Equity in Action, the agency has heard questions from policyholders and industry partners such as, “How does FEMA calculate my rate?” and “How can I reduce my flood risk and pay less?”

To provide answers to these important questions, FEMA has published new materials to the Risk Rating 2.0: Equity in Action resource webpage on FloodSmart.gov.

These user-friendly educational tools are a part of the agency’s commitment to increasing transparency and communication.  The materials provide in-depth explanations on topics ranging from flood risk variables and individualized policy pricing to discounts and other options available to policyholders.

This collection is updated regularly and insurance providers are encouraged to use and share these resources to help their clients protect lives and to help close the flood insurance gap.


Facts to know about flood insurance

  • Homeowners, business owners and renters all can purchase flood insurance as long as their community participates in the NFIP.
  • Residents do not have to live in a floodplain to buy flood insurance.  In fact, more than 25 percent of flood insurance claims come from medium or low-risk flood areas.
  • There is a 30-day waiting period from the time the premium is paid until the time the policy becomes effective.
  • Compared to a fire, people in floodplains are four times more likely to have a flood during their 30-year mortgage.
  • Flood insurance coverage is available for residential and business structures and contents.
    • A single-family home can be insured for up to $250,000. 
    • An additional $100,000 can be purchased for contents. 
    • Commercial buildings can be insured for up to $500,000.
    • Business contents can be covered for up to $500,000.
  • Renters can purchase contents coverage for up to $100,000 to cover personal belongings.
  • Home-based business owners need to purchase separate coverage for the business and/or contents.  Coverage is not automatically included under a homeowner’s flood insurance policy, even if the business is located inside the home.
  • A flood insurance policy reimburses individuals to certain limits for actions taken to prevent flood damage.  These actions can include moving the insured contents to a safe place and/or the cost of purchasing sandbags, plastic sheeting, lumber, pumps, etc.
  • Flood insurance claims are paid even if a federal disaster is not declared by the President.
  • A flood insurance claim will reimburse individuals for covered losses and never has to be repaid, unlike a disaster assistance loan.
  • Flood insurance claims are handled quickly so that flood victims can recover quickly.
  • Flood insurance claims are paid by policyholders’ premiums, not tax dollars.

Flood insurance is available from any licensed insurance agent, or through NFIP by calling




How do residents go about getting a flood insurance policy and what else do they need to know?

  • First, contact local government officials to determine whether your community participates in the NFIP.  If it does, you can buy flood insurance coverage.  If it does not, they cannot buy coverage.
  • Next, contact your insurance agent or the NFIP and tell them you want more information about flood insurance. 
  • The cost will be determined in part by whether you live in a floodplain, also known as Special Flood Hazard Area (SFHA).  Your local building official(s) should have maps showing if there are SFHAs.  Residents can determine whether they are in a low, medium or high-risk area by checking these maps.
  • A flood insurance policy may also pay up to $30,000 to help pay the cost to comply with a floodplain ordinance if the home has been damaged by a flood, also known as Increased Cost of Compliance (ICC).

Visit Floodsmart.gov for information on determining your flood risk, finding an agent, or estimating your own premiums.



Additional Information

I have a living area in my basement.?  Is that covered?

A basement is defined as any area that is below grade on all four sides.?  In some cases, sunken living rooms can be defined as a basement.?  Building coverage in basements is limited to systems that service the building, such as electrical boxes, heat pumps and air conditioners. 

Cleanup, as well as contents in basements are covered with a few exceptions such as a washer, dryer, freezer and the food in it.?

Does my NFIP policy cover my additional living expenses when I cannot return home?

No. There is no coverage for Additional Living Expenses or Loss of Use or Business Interruption.

Does my NFIP policy cover mold or mildew?

Damage from mold and/or mildew resulting from the effects of a flood is covered but each case is evaluated.?  Mold and/or mildew conditions that existed prior to a flooding event are not covered.

Does my NFIP policy cover water backed up from the sewer?

If the damage was caused by a flood.






Mitigation Matters!  

Have questions? Contact us at help@kymitigation.org.


Don’t forget to join the KAMM group on LinkedIn and Facebook.

KAMM is a non-profit 501 (c) (3)