NJM’s Here for You

Flood Insurance Policy Facts

Fact: Homeowners Insurance Doesn't Cover Flooding

It's true. A homeowners, renters, or dwelling policy won’t provide coverage for flood damage. That's why the National Flood Insurance Program (NFIP) exists. It makes flood coverage available nationwide via the federal government working with the private insurance industry.

Where You Live Is Not Important

You don’t need to live near water to experience a flood. Bad storms, hurricanes, and melting snow pack can saturate the ground and cause flooding. As long as your community participates in NFIP, you can purchase a flood policy. Flood insurance is available to you whether you’re at high or low risk.

Program Highlights

Coverage is available separately for residential buildings and contents:

  • Building coverage limits - Up to $250,000 for single family and 2–4 family dwellings
  • Contents coverage limits - Up to $100,000

A flood insurance policy also reimburses you for actions you take to prevent flood damage. For example, costs for moving insured contents to a safe location are reimbursed up to $1000 with no deductible. Other costs, such as for sandbags, plastic sheeting and lumber, pumps, fill for temporary levees, and wood to save the building can be reimbursed up to a limit of $1000 with no deductible. There is a policy stipulation that the property needs to be in eminent danger of being flooded.

There is limited coverage in a basement area. The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides. Under building coverage, basements are insured for cleanup and items used to service the building, such as furnaces, hot water heaters, air conditioners in their functioning location, utility connections, circuit breaker boxes, pumps and tanks used in solar energy systems, as well as the repair of structural damage to basement walls. Items in basements insured under contents coverage are limited to clothes washers and dryers, and food freezers and their contents. Improvements to a basement, such as finished walls, floors or ceilings, as well as personal belongings located in a basement are not covered under either NFIP building or contents coverage.

These “FLOOD FACTS” are provided to acquaint you with the National Flood Insurance Program. This document neither provides nor interprets flood coverage.