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Flood Insurance Myths and Facts

Release date: 
September 25, 2003
Release Number: 

Indianapolis, IN - One of the ways to protect your home in future floods is to purchase flood insurance. In the days following a flood disaster, however, residents may be misled by rumors they hear about flood insurance. When you have suffered a loss, the last thing you need is misinformation.

Flood insurance is available to any property owner located in a community participating in the National Flood Insurance Program (NFIP). In 1968, Congress created the NFIP to provide flood insurance at a reasonable cost in exchange for careful management by local communities of flood-prone areas. The Mitigation Division of the Federal Emergency Management Agency (FEMA) manages the NFIP and oversees the floodplain management and mapping components of the Program.

Homeowners, business owners and renters in communities participating in the NFIP can purchase flood insurance from any licensed insurance agent, or through NFIP by calling 800-427-4661.

To clear up misconceptions about National Flood Insurance, here are some common myths about the NFIP, and the real facts, to give the full story about this valuable protection.

MYTH: My standard homeowners' insurance will cover me if my house is damaged or destroyed in a flood.

FACT: Homeowners' insurance does not cover flood damage. Federal flood insurance, purchased through your insurance agent or company, is the only guaranteed flood insurance available for your home.

MYTH: Federal disaster aid, available during and after a flood, will reimburse me for losses. Therefore, I don't need to buy flood insurance for my home and belongings.

FACT: Federal Emergency Management Agency (FEMA) disaster aid is only available during presidentially declared disasters. Federal aid is often in the form of a loan from the Small Business Administration (SBA) that you must pay back with interest. Flood insurance policies pay claims whether or not a disaster is declared.

MYTH: I live outside the floodplain, so I don't need to buy flood insurance.

FACT: More than 25 percent of the National Flood Insurance Program (NFIP) claims are for structures outside identified floodplains, in low to medium risk areas. Floods can occur anywhere. An area that is near a levee or a dam is at risk of the levee or dam breaking. People who face even moderate flood risks should get insurance, which can be purchased for as little as $136 per year.

MYTH: I can't buy flood insurance because my home has been flooded previously.

FACT: If your community is participating in the NFIP, it doesn't matter that your home has been flooded before. You may still buy flood insurance.

MYTH: If people don't want to purchase flood insurance, it's their own business. It doesn't really affect me.

FACT: When people do not buy flood insurance, you pay more for federal and state disaster relief. Flood insurance is one of the best ways to keep disaster relief costs down for all taxpayers.

MYTH: Flood insurance is available only for homeowners.

FACT: Flood insurance is available to protect homes, condominiums and nonresidential buildings, including farm and commercial structures, whether in or out of the floodplain in participating communities. Contents coverage also is available, so renters can receive coverage as well.

MYTH: I can't buy insurance to cover what's in my house.

FACT: There are two types of flood insurance policies, one covers the building structure and another covers the building's contents. Homeowners should purchase both types of polici...

Last Updated: 
January 3, 2018 - 12:52