What Is Flood Insurance?
Flood Insurance: Separate insurance for flood damage, required for federally backed loans in high-risk flood zones.
Flood insurance covers damage from flooding, which standard homeowners policies exclude. It's sold through the National Flood Insurance Program (NFIP) and private insurers.
When it's required
If a home is in a special flood hazard area (zones beginning with A or V on FEMA flood maps) and the loan is federally backed or regulated, which covers nearly all mortgages, flood insurance is required. The lender orders a flood certification to check.
Cost
Premiums depend on the home's flood risk, elevation, foundation and replacement cost. They can range from a few hundred to several thousand dollars a year.
Good to know
- Check the flood zone before you make an offer. Flood insurance can change the payment significantly.
- Many floods happen outside high-risk zones. Coverage is often inexpensive there and may be worth having.
- NFIP policies generally have a 30-day waiting period, except when bought in connection with a new loan.