National Flood Insurance Program

Summary of Coverage

FEMA F-679 / November 2012
What Is a Flood? 

Flood insurance covers direct physical loss caused by 

“flood.” In simple terms, a flood is an excess of water on 

land that is normally dry. Here’s the official definition 

used by the National Flood Insurance Program. 

A flood is (1) “A general and temporary condition of 

partial or complete inundation of two or more acres of 

normally dry land area or of two or more properties (at 

least one of which is your property) from a. overflow of 

inland or tidal waters; b. unusual and rapid accumulation 

or runoff of surface waters from any source; or c. 

mudflow*. (2) collapse or subsidence of land along the 

shore of a lake or similar body of water as a result of 

erosion or undermining caused by waves or currents of 

water exceeding anticipated cyclical levels that result in a 

flood as defined in A.1.a. above.

* Mudflow is defined (in part) as “A river of liquid and flowing mud 

on the surfaces of normally dry land areas, as when earth is carried 

by a current of water.”

Three Important Facts About Your 

Flood Policy

A Standard Flood Insurance Policy is a single-peril (flood) 

policy that pays for direct physical damage to your insured 

property up to the replacement cost or Actual Cash Value 

(ACV) (see “How Flood Damages Are Valued”) of the actual 

damages or the policy limit of liability, whichever is less. 

1. Contents coverage must be purchased separately. 

2. It is not a valued policy. A valued policy pays the 

limit of liability in the event of a total loss. For example: 

Your home is totally destroyed by a fire and it costs 

$150,000 to rebuild it. If your homeowners insurance 

policy is a valued policy with a $200,000 limit of 

liability on the building, you would receive $200,000. 

Flood insurance pays the replacement cost or ACV 

of actual damages, up to the policy limit.

3. It is not a guaranteed replacement cost policy.

A guaranteed replacement cost policy pays the cost to 

rebuild your home regardless of the limit of liability. 

For example: Your home is totally destroyed by a fire 

and it costs $200,000 to rebuild it. If your homeowners 

insurance policy is a guaranteed replacement cost policy 

with a $150,000 limit of liability on the building, you 

would receive $200,000. Flood insurance does not pay 

more than the policy limit.

This document was prepared by the National Flood Insurance Program (NFIP) to help you 

understand your flood insurance policy. It provides general information about deductibles, what is 

and is not covered by flood insurance, and how items are valued at the time of loss.

This document is based on the Standard Flood Insurance Policy Dwelling Form, which is used to 

insure one-to-four-family residential buildings and single-family dwelling units in a condominium 

building. There are two other policy forms: 

The General Property Form is used to insure five-or-more-family residential buildings and 

non-residential buildings.

The Residential Condominium Building Association Policy Form is used to insure residential 

condominium association buildings. 

While the three forms are similar, they do contain some important differences. For example, the 

General Property Form does not provide coverage for contents in any building other than the insured 

building, and the Residential Condominium Building Association Policy Form contains a coinsurance 

clause, which provides for a pro-rata reduction in the building claim payment if the building is not 

insured to 80 percent of its replacement value.

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Two Types of Flood Insurance Coverage

The NFIP’s Dwelling Form offers coverage for: 1) Building Property, up to $250,000, and 2) Personal 

Property (Contents), up to $100,000. The NFIP encourages people to purchase both types of coverage. Your 

mortgage company may require that you purchase a certain amount of flood insurance coverage. 

For information about your specific limits of coverage and deductibles, refer to the Declarations Page in your flood 

insurance policy. It is also a good idea to review your policy with your insurance agent or company representative. 
Choosing Deductibles

Choosing the amount of your deductible is an important 

decision. As with car or homeowners insurance, choosing 

a higher deductible will lower the premium you pay, but 

will also reduce your claim payment. 

You can choose different deductibles for Building Property 

and Personal Property coverage. The deductibles will apply 

separately to Building Property and Personal Property 

claims. Your mortgage company may require that your 

deductible be no more than a certain amount.

Review the Declarations Page in your flood insurance 

policy for amounts of coverage and deductibles. Talk 

with your insurance agent, company representative, or 

lender about raising or lowering deductibles within an 

allowable range.

Physical damage to your building or personal property “directly” caused by a flood is covered by your flood 

insurance policy. For example, damages caused by a sewer backup are covered if the backup is a direct result of 

flooding. If the backup is caused by some other problem, the damages are not covered.

The following charts provide general guidance on items covered and not covered by flood insurance. 

Refer to your policy for the complete list. (For information on flood insurance coverage limitations in areas 

below the lowest elevated floor and in basements, see page 3 of this document.)

Reminder: Keep Your Receipts

While you are not expected to keep receipts 

for every household item and article of 

clothing, do try to keep receipts for electronic 

equipment, wall-to-wall carpeting, major 

appliances, and other higher-cost items. Your 

adjuster will be able to process your claim 

more quickly when you can prove how much 

items cost at the time of purchase. Also keep 

receipts for any repairs made with a flood 

insurance settlement.

What is insured under 

Building Property coverage:

The insured building and 

its foundation. 

The electrical and 

plumbing systems.

Central air-conditioning 

equipment, furnaces, and 

water heaters. 

Refrigerators, cooking stoves, 

and built-in appliances such 

as dishwashers. 

Permanently installed carpeting 

over an unfinished floor. 

Permanently installed 

paneling, wallboard, 

bookcases, and cabinets. 

Window blinds.

A detached garage (up to 10 

percent of Building Property 

coverage); detached buildings 

(other than detached garages) 

require a separate Building 

Property policy.

Debris removal.

What is insured under 

Personal Property coverage:

Personal belongings such as 

clothing, furniture, and 

electronic equipment.

Curtains.

Portable and window 

air conditioners.

Portable microwave ovens and 

portable dishwashers.

Carpets not included in building 

coverage (see above).

Clothes washers and dryers.

Food freezers and the food 

in them.

Certain valuable items such 

as original artwork and furs 

(up to $2,500).

What is not insured under either 

Building Property or Personal 

Property coverage:

Damage caused by moisture, 

mildew, or mold that could 

have been avoided by the 

property owner.

Currency, precious metals, 

and valuable papers such as 

stock certificates.

Property and belongings outside 

of a building such as trees, 

plants, wells, septic systems, 

walks, decks, patios, fences, 

seawalls, hot tubs, and 

swimming pools.

Living expenses such as 

temporary housing.

Financial losses caused by 

business interruption or loss of 

use of insured property.

Most self-propelled vehicles such 

as cars, including their parts (see 

Section IV.5 in your policy).

General Guidance on Flood Insurance Coverage

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What Is Covered by Flood Insurance—and What Is Not
What is insured under 

Building Property coverage:

Foundation walls, anchorage 

systems, and staircases attached 

to the building. 

Central air conditioners. 

Cisterns and the water in them. 

Drywall for walls and ceilings 

(in basements only).

Non-flammable insulation 

(in basements only).

Electrical outlets, switches, and 

circuit-breaker boxes. 

Fuel tanks and the fuel in them, 

solar energy equipment, and well 

water tanks and pumps. 

Furnaces, water heaters, heat 

pumps, and sump pumps.

What is insured under 

Personal Property coverage:

Washers and dryers.

Food freezers and the food in 

them (but not refrigerators).

Portable and window 

air conditioners.

What is not insured under either 

Building Property or Personal 

Property coverage:

Paneling, bookcases, and 

window treatments such as 

curtains and blinds. 

Carpeting, area carpets, and other 

floor coverings such as tile. 

Drywall for walls and ceilings 

(below the lowest elevated floor). 

Walls and ceilings not made 

of drywall.

In certain cases staircases 

and elevators.

Most personal property such as 

clothing, electronic equipment, 

kitchen supplies, and furniture.

Flood insurance coverage is limited in areas below the lowest elevated floor (including crawlspaces) depending 

on the flood zone and date of construction (refer to Part III, Section A.8 in your policy) and in basements 

regardless of zone, or date of construction. As illustrated below, these areas include 1) basements, 2) crawlspaces 

under an elevated building, 3) enclosed areas beneath buildings elevated on full-story foundation walls that are 

sometimes referred to as “walkout basements,” and 4) enclosed areas under other types of elevated buildings.

4. Elevated building with enclosure 

Coverage limitations apply to “enclosed areas” at ground level 

under an “elevated building.” An elevated building allows water to 

flow freely under the living quarters, thus putting less strain on the 

building in the event of flooding. An “enclosure” is the area below 

the lowest elevated floor that is fully shut in by rigid walls.

3. ELEVATED BUILDING ON FULL-STORY 

FOUNDATION WALLS 

Coverage limitations apply to the enclosed areas (lower floor) even 

when a building is constructed with what is sometimes called a 

“walkout basement.” 

1. Basement

Coverage limitations apply to “basements,” which are any area of 

the building, including a sunken room or sunken portion of a room, 

having its floor below ground level on all sides. 

2. Crawlspace 

When a building is elevated on foundation walls, coverage 

limitations apply to the “crawlspace” below.

General Guidance on Flood Insurance Coverage Limitations in Areas 

Below the Lowest Elevated Floor and in Basements

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Actual Cash Value (ACV)

ACV is Replacement Cost Value at the time of loss, 

less the value of its physical depreciation. 

Some building items such as appliances and carpeting 

are always adjusted on an ACV basis. For example, 

wall-to-wall carpeting could lose from 10 to 14 percent 

of its value each year, depending on the quality of 

the carpeting. This depreciation would be factored 

into the adjustment.

Personal property is always valued at ACV.

Replacement Cost Value (RCV)

RCV is the cost, without depreciation, to replace that 

part of a building that is damaged. To be eligible, three 

conditions must be met: 

1. The building must be a single-family dwelling; and

2. The building must be your principal residence at 

the time of loss, meaning you live there at least 

80 percent of the year; and

3. Your building coverage is at least 80 percent of 

the full replacement cost of the building, or is the 

maximum available for the property under the NFIP.

The value of flood damage covered under the Dwelling Form is based on either Replacement Cost Value 

or Actual Cash Value. 

Special Considerations for 

Multiple Claims

Owners of NFIP-insured residential property, 

identified as “severe repetitive loss” (SRL) property, 

may be eligible for a FEMA mitigation grant for 

property improvements that reduce the likelihood 

of future flood damages. Participation in the SRL 

program is voluntary, but property owners who refuse 

an offer of mitigation may expect an increase in their 

flood insurance premium rate equal to 150% of the 

chargeable rate for the property at the time the offer 

was made.

An NFIP-insured property is defined as a severe repetitive 

loss property when it meets one of the following criteria 

since 1978, regardless of ownership: 

1. Four or more separate flood claim payments have 

been made and each claim payment exceeds $5,000 

(including building and contents payments), or

2. At least two separate flood claim payments (building 

payments only) have been made and the cumulative 

payments exceed the current value of the property.

A final note

This document provides general information about flood 

insurance coverage. However, please be aware that your 

Standard Flood Insurance Policy, your application, and 

any endorsements, including the Declarations Page, make 

up your official contract of insurance. Any differences 

between this information and your policy will be resolved 

in favor of your policy. If you have questions, call your 

insurance agent or company representative. 

What Is Increased Cost of Compliance 

(ICC) Coverage? 

Most NFIP policies include ICC coverage, which 

applies when flood damages are severe. ICC 

coverage provides up to $30,000 of the cost to 

elevate, demolish, or relocate your home. If your 

community declares your home “substantially 

damaged” or “repetitively damaged” by a flood, it 

will require you to bring your home up to current 

community standards. 

The total amount of your building claim and 

ICC claim cannot exceed the maximum limit for 

Building Property coverage ($250,000 for a singlefamily home). Having an ICC claim does not affect a 

Personal Property claim (up to $100,000), which is 

paid separately. 

Details about eligibility are in Section III.D. of 

your policy. 

Congress created the National Flood Insurance Program 

(NFIP) in 1968 to reduce future flood damage through 

floodplain management, and to provide people with 

flood insurance through individual agents and insurance 

companies. The Federal Emergency Management Agency 

(FEMA) manages the NFIP. As required by Congress, 

this document was prepared by the NFIP to help flood 

insurance policyholders understand their policy.

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How Flood Damages Are Valued
Actual Cash Value (ACV)

ACV is Replacement Cost Value at the time of loss, 

less the value of its physical depreciation. 

Some building items such as appliances and carpeting 

are always adjusted on an ACV basis. For example, 

wall-to-wall carpeting could lose from 10 to 14 percent 

of its value each year, depending on the quality of 

the carpeting. This depreciation would be factored 

into the adjustment.

Personal property is always valued at ACV.

Replacement Cost Value (RCV)

RCV is the cost, without depreciation, to replace that 

part of a building that is damaged. To be eligible, three 

conditions must be met: 

1. The building must be a single-family dwelling; and

2. The building must be your principal residence at 

the time of loss, meaning you live there at least 

80 percent of the year; and

3. Your building coverage is at least 80 percent of 

the full replacement cost of the building, or is the 

maximum available for the property under the NFIP.

The value of flood damage covered under the Dwelling Form is based on either Replacement Cost Value 

or Actual Cash Value. 

Special Considerations for 

Multiple Claims

Owners of NFIP-insured residential property, 

identified as “severe repetitive loss” (SRL) property, 

may be eligible for a FEMA mitigation grant for 

property improvements that reduce the likelihood 

of future flood damages. Participation in the SRL 

program is voluntary, but property owners who refuse 

an offer of mitigation may expect an increase in their 

flood insurance premium rate equal to 150% of the 

chargeable rate for the property at the time the offer 

was made.

An NFIP-insured property is defined as a severe repetitive 

loss property when it meets one of the following criteria 

since 1978, regardless of ownership: 

1. Four or more separate flood claim payments have 

been made and each claim payment exceeds $5,000 

(including building and contents payments), or

2. At least two separate flood claim payments (building 

payments only) have been made and the cumulative 

payments exceed the current value of the property.

A final note

This document provides general information about flood 

insurance coverage. However, please be aware that your 

Standard Flood Insurance Policy, your application, and 

any endorsements, including the Declarations Page, make 

up your official contract of insurance. Any differences 

between this information and your policy will be resolved 

in favor of your policy. If you have questions, call your 

insurance agent or company representative. 

What Is Increased Cost of Compliance 

(ICC) Coverage? 

Most NFIP policies include ICC coverage, which 

applies when flood damages are severe. ICC 

coverage provides up to $30,000 of the cost to 

elevate, demolish, or relocate your home. If your 

community declares your home “substantially 

damaged” or “repetitively damaged” by a flood, it 

will require you to bring your home up to current 

community standards. 

The total amount of your building claim and 

ICC claim cannot exceed the maximum limit for 

Building Property coverage ($250,000 for a singlefamily home). Having an ICC claim does not affect a 

Personal Property claim (up to $100,000), which is 

paid separately. 

Details about eligibility are in Section III.D. of 

your policy. 

Congress created the National Flood Insurance Program 

(NFIP) in 1968 to reduce future flood damage through 

floodplain management, and to provide people with 

flood insurance through individual agents and insurance 

companies. The Federal Emergency Management Agency 

(FEMA) manages the NFIP. As required by Congress, 

this document was prepared by the NFIP to help flood 

insurance policyholders understand their policy.

4

How Flood Damages Are Valued