Search
 
Research

The fundamentals of flood insurance

Review what flood insurance does and doesn’t cover as well as how ‘flooding’ is defined by the NFIP.

Flood insurance covers direct physical damage to insured property up to the “replacement cost or actual cash value of the damages or the policy limit liability, whichever is less,” according to a NFIP bulletin. Credit: On-Air/Adobe Stock Flood insurance covers direct physical damage to insured property up to the “replacement cost or actual cash value of the damages or the policy limit liability, whichever is less,” according to an NFIP bulletin. Credit: On-Air/Adobe Stock

A common misconception policyholders carry is that a standard home policy will cover them in the event of a flood. They typically do not, which makes for a huge oversight as the Federal Emergency Management Agency reported that from 1996-2019 nearly all (99%) of U.S. counties were affected by flooding.

Although the private flood insurance market has been growing, most flood insurance policies in the U.S. are written through the National Flood Insurance Program (NFIP). These policies cover direct physical damage to insured property up to the “replacement cost or actual cash value of the damages or the policy limit liability, whichever is less,” according to an NFIP bulletin.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Steve Hallo

Steve Hallo

Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected].  

More from this author

 

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2023 ALM Global, LLC. All Rights Reserved.