Created in 1968, the National Flood Insurance Program (NFIP) was developed by the Federal Government to give property owners the ability to insure their properties against flood loss that private insurers deemed to risky.
The program is administered by the Federal Emergency Management Agency (FEMA), and works with over 90 private insurance carriers to provide flood insurance to cover damages from heavy rains to flooding. The NFIP rates are the same from company to company, so premiums should be the same regardless of the servicing insurance company.
How Much Coverage is Offered by the NFIP?
Unlike Homeowners insurance, the NFIP has max limits on both building and contents coverage. The max building coverage available by the NFIP is $250k and contents coverage is limited to $100k. Higher “excess” limits are typically available from private market non-admitted carriers.
Are There Alternatives to NFIP?
The private market is constantly evolving, and as rates increase we expect to see more carriers enter the market. A few of the Homeowners carriers we represent have started to offer private market alternatives that offer some broader coverages, such as replacement cost on contents and loss of use coverage. We also have access to private market, non-admitted carriers that are starting to offer competitive pricing and broad coverage.
But I don’t live in a Special Flood Hazard Area. Why Do I Need Flood Insurance?
In Florida all residents are at risk of flooding. Almost all parts of Tampa Bay would be underwater if we were to suffer a serious hurricane. Statistics show that low to moderate risk areas submit over 20% of NFIP claims, and they receive 1/3 of disaster assistance for flooding. For individuals in non-Special Flood Hazard Areas, a Preferred Risk Policy (PRP) may be available at a significantly reduced premium.
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