Flood Insurance

Standard homeowners’ insurance does not cover flooding, that's why it is important to have financial protection from floods that cause damage to structures and property.

In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP is administered by the Federal Emergency Management Agency (FEMA), which works closely with more than 80 private insurance companies to offer flood insurance to homeowners, renters, and business owners.

Individuals, businesses and others buying, building or improving property located in regulatory floodplains are required to purchase flood insurance as a prerequisite for receiving any type of direct or indirect federal financial assistance (e.g., any loan, grant, guaranty, insurance, payment, subsidy or disaster assistance). The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding. To find out if your community participates in the NFIP, visit our Floodplain Community Search Page.

Recently Received New Floodplain Maps?

Newly Identified as Lower Flood Risk

When going from a high-risk zone (e.g., Zone A) to a moderate-low risk zone (i.e., Zone X), the mandatory flood insurance purchase requirement is removed, though lenders always reserve the right to require it. Because flood zones and Base Flood Elevations (BFEs) are no longer a rating variable, there is no change in premium when the map changes if the property owner chooses to continue coverage. Similarly, a decrease in BFE will result in no change in premium when the map changes.

Newly Identified as Increased Flood Risk

Some property owners and renters may be in an area where the BFE increases or the high-risk flood zone increases to a higher risk. Since flood zones and BFEs are no longer a rating variable under the new pricing approach, this means there would be no change in their new pricing approach premium when the map changes. Policies already grandfather-rated from the previous rating system will be on a glide path of 18% annual increases until they reach full-risk rates (except those that are statutorily on a 25% glide path, like pre-FIRM secondary homes and businesses). 

For property owners and renters that are newly identified as being in a high-risk flood area from the moderate- to low-risk flood area, the National Flood Insurance Program (NFIP) offers a one-time cost-saving option called the Newly Mapped Discount. If there is a federally backed loan on the property, the federal mandatory purchase requirement applies. As a result, most lenders will require flood insurance. Property owners and renters previously designated outside of the Special Flood Hazard Area, and newly identified to be in a Special Flood Hazard Area, and whose policy is effective within 12 months of the effective date of the new map, may be eligible for a one-time Newly Mapped Discount. Upon renewal, policy rates will then increase on a 15% annual glide path until they reach their full-risk rate. If the property is sold, the discounted policy can be transferred to the new owners. Property owners must maintain continuous coverage to keep their Newly Mapped discount. 

NFIP's New Pricing Approach

FEMA has updated the National Flood Insurance Program's (NFIP) pricing methodology using a new Pricing Approach. The methodology enables FEMA to deliver rates that are actuarily sound, equitable, easier to understand and better reflect a property’s flood risk. FEMA implemented the system using a phased approach to rolling out the new rates. New policies beginning Oct. 1, 2021, are subject to the new rating methodology. Also beginning Oct. 1, existing policyholders eligible for renewal were able to take advantage of immediate decreases in their premiums. All policies renewed on or after April 1, 2022, are subject to the new rating methodology. Current National Flood Insurance Program policyholders can contact their insurance company or insurance agent at any time to learn more about what the new Pricing Approach means to them.