State Law And Flood Insurance - Do You Need It?

If you live in a flood plain, state flood insurance is something you probably have questions about. With the National Flood Insurance Program requiring flood insurance in certain areas, is it necessary to go above and beyond with state insurance programs? Here’s what you need to know to make an informed decision.

National Flood Insurance Programs


Flood insurance is regulated and controlled on a federal level through the NFIA, or the National Flood Insurance Act. This act requires lenders offer insurance in certain flood risk areas. The lender must require insurance coverage for all homes mortgaged that are in high risk areas. The requirements are industry standard since the coverage is regulated by FEMA, the Federal Emergency Management Agency.

State Flood Insurance Requirements

Since flood insurance is regulated on a federal level, carrying special insurance with state laws in mind isn’t generally necessary. Occasionally you may find some states that require flood insurance for areas that the NFIA doesn’t require. The NFIA only requires insurance in areas considered high risk. A few states will require flood insurance in moderate to low risk areas as well.

Floodplain Managers and Mapping

Every year the National Flood Insurance Program requires mapping to be conducted to assess the risk in flood plains. The mapping will sometimes add areas or upgrade low grade areas. The remapping will assess the risk of the flooding using statistics gathered over time and determine if areas are still a risk, or if areas need to be added or upgraded. Each state has a list of Certified Floodplain Managers that handle the local areas mapping and insurance requirements. A quick visit to the states website will show you the names and how to contact your local managers if you have a concern.

Flood Insurance Limits

Flood insurance works differently than other insurance programs since it is handled by the government. There are two separate policies that will be in effect with your flood insurance. One is the building property coverage. This will cover the structure itself up to $250,000. The second is the personal property coverage. This will cover the items in your home that may have been damaged or destroyed up to $100,000.

You will have a deductible, and the deductible amount you choose will go a long way in determining the price for your premiums. You want to make sure you choose a deductible low enough to make it affordable if something were to happen.

Coverage isn’t available over these limits and supplemental policies aren’t guaranteed or backed by the government. This is something to keep in mind.

Having state flood insurance isn’t necessary, but having flood insurance while you’re in a flood plain is. Check with your state and find out what the requirements are for each zone, and find out what zone you are in. Flood insurance is not only mandatory it’s a good thing to have.

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