. . . Or Could It?

Floods can happen anytime, anywhere. 

When a flood strikes, it causes anguish, 

destruction, and financial hardship–and 

the joy of home ownership turns to 

heartache.

There ought to be a law!

The Flood Disaster Protection Act of 

1973 and the National Flood Insurance 

Reform Act of 1994 help protect you 

from financial losses caused by flooding. 

Backed by the U.S. Government, federal 

flood insurance is available in the more 

than 20,000 communities throughout 

America that participate in the National 

Flood Insurance Program (NFIP).

National Flood Insurance Program

Nothing Could 

Dampen the Joy of 

Home Ownership . . . 

For more information about the NFIP 

and flood insurance, call 

1-800-427-4661, 

or contact your 

insurance company or agent. 

For an agent referral, call 

1-888-435-6637

TDD 1-800-427-5593

http://www.fema.gov/business/nfip 

http://www.floodsmart.gov

F-080 (6/07)
How Much Flood Insurance 

Should You Buy?

For federally secured financing in an 

SFHA, the law requires flood insurance 

in an amount equal to the outstanding 

principal balance of the loan, the value of 

the building, or the maximum coverage 

available, whichever is less. It also requires 

flood insurance to be maintained for the 

life of the loan.

While the law requires coverage only for 

the loan balance, you should consider 

protecting your equity. It’s wise to insure 

primary residences, and businesses, in 

sufficient amounts to fully protect your 

building and its contents.

The NFIP provides up to $250,000 coverage 

for single-family residential buildings and 

up to $100,000 coverage for contents. 

Other residential and commercial property 

owners can also obtain flood insurance.

Flood Insurance Helps Put 

You in Control

Flood insurance provides coverage that 

most homeowners policies don’t—

coverage for damage to buildings and 

contents from flooding, flood-related 

erosion, and flood-caused mudslides.

This coverage from the NFIP is an asset 

to you as a home or business owner. It 

reimburses you for covered financial losses 

from flood damage. For a modest annual 

premium, you can have peace of mind that 

you will be paid for your eligible losses.

The average annual premium for flood 

insurance is around $400 per year. 

Compare that to disaster loan payments 

that, with interest, could amount to over 

$300 per month!

All taxpayers benefit, too, when those in 

flood-prone areas buy flood insurance. As 

floods occur, the insurance mechanism 

pays for the covered losses, rather than 

U.S. Treasury funds for federal disaster 

assistance.

Financial Protection and 

Peace of Mind

NFIP flood insurance protects your 

most important investment–your 

home or business and its contents. 

The insurance is considerably less 

expensive than federal disaster loans 

and it’s 100 percent backed by the 

U.S. government.

Flood Insurance May Be 

Required by Law

You must have flood insurance to get 

federally secured financing to buy, 

construct, or improve a building in a highrisk area known as a Special Flood Hazard 

Area (SFHA), where more than 75 percent 

of all flood claims are paid. Lending 

institutions that are federally regulated or 

insured must determine if the building is 

in an SFHA. If it is, the lender must require 

flood insurance on:

• FHA loans

• VA loans

• second mortgages

• home equity loans

• home improvement loans

• construction loans

• commercial loans

• farm credit loans