Flood Insurance Guru Podcast Ep. 2: National Flood Insurance Program
Ninety percent of natural disasters in the U.S. involve flooding. When disaster strikes, your first instinct is to find help. In Episode 2 of the Flood Insurance Guru Podcast, we dive into the National Flood Insurance Program (NFIP): who it helps, its benefits, and how to make smart choices for your property.
The Flood Insurance Guru Podcast aims to educate property owners about floods, the government’s response to flood losses, and key tips to protect your home or business.
A Quick Rundown of the National Flood Insurance Program (NFIP)
The NFIP was created in 1968 in response to devastating floods along the Mississippi River. Congress established the National Flood Insurance Act to provide resources, insurance options, and guidance for communities affected by uncontrollable disasters.
The NFIP helps by:
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Covering property damage caused by floods
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Improving floodplain management regulations
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Reducing floodplain development
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Assessing community flood risks
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Providing and maintaining flood maps to prevent future damage
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Offering insurance coverage in participating communities
NFIP and Participating Communities
Participating communities agree to follow standards set by the federal government to mitigate flood hazards. Communities that do not participate usually cite affordability or inability to meet NFIP requirements. Non-participating communities do not receive NFIP coverage, disaster assistance, or grants.
Without flood insurance, property owners face a major risk during disasters. Understanding NFIP participation is the first step in protecting your property.
Residential Property and Renters
Before choosing coverage, know the type of property you own: residential, commercial, or both. For residential properties, the NFIP provides the following coverage:
Coverage for Residential Properties:
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Up to $250,000 for the building
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Up to $100,000 for personal property
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Additional living expenses: only covered through a presidential disaster declaration
Important Notes:
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NFIP does not cover water damage not caused by flooding; that falls under homeowners insurance.
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There are two classifications: Primary Residence and Secondary/Investment/Rental Residence.
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Properties classified as secondary or rental incur a $250 surcharge per policy. Multiple rental properties can increase this cost.
Commercial Property
For commercial properties, NFIP provides:
Coverage for Commercial Properties:
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Up to $500,000 for the building
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Up to $100,000 for contents
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No $250 surcharge
Tips for Business Owners:
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Label rental or investment properties as “commercial” when possible to maximize coverage and reduce costs.
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Remember, NFIP covers property damage, but not additional funds to keep your business running after a flood.
Planning Your Flood Insurance Strategy
The NFIP is the government’s solution for assisting communities impacted by flooding. Now that you understand how it works, you can plan how to secure the right flood insurance for your property.
To explore more options, including private flood insurance alternatives, stay tuned for future episodes of the Flood Insurance Guru Podcast.
Need Help or Have Questions?
Our team has an educational background in flood mitigation. If you’re unsure about your community’s flood risk, NFIP requirements, or property coverage, contact us for guidance.
Watch more educational flood videos on our YouTube channel and visit our official website.
