Insure Your Property

What is the NFIP?

The National Flood Insurance Program (NFIP) is a federal program enabling property owners in participating communities to purchase flood insurance on eligible buildings and contents, whether they are in or out of a floodplain. Monroe County participates in the NFIP, making federally backed flood insurance available to its homeowners, renters, condo owners/renters, and commercial owners/renters. Costs vary depending on how much insurance is purchased, what it covers, and the property's flood risk.

All policy forms provide coverage for buildings and contents. However, residents should discuss insuring their personal property with their agent, since content coverage is optional. Typically, there is a 30-day waiting period from the date of purchase before your policy goes into effect. Now is the best time to buy flood insurance.

To find out more about flood insurance and who writes flood insurance in your area visit www.floodsmart.gov.

Mandatory Purchase Requirement

Pursuant to the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in Special Flood Hazard Areas (SFHAs). An SFHA is defined as an A or V flood zone on a Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM).

The mandatory purchase requirement also applies to secured loans from financial institutions, commercial lenders, savings and loan associa­tions, savings banks, and credit unions that are regulated, supervised, or insured by federal agencies, such as the Federal Reserve, the Federal Deposit Insurance Corporation, the Comptroller of Currency, the Farm Credit Administration, the Office of Thrift Supervision, and the National Credit Union Administration. It further applies to all loans purchased by Fannie Mae or Freddie Mac in the secondary mortgage market.

Federal financial assistance programs affected by the laws include loans and grants from agencies such as the Department of Veterans Affairs, Farmers Home Administration, Federal Housing Administration, Small Business Administration, and FEMA disaster assistance.

How it Works

When making, increasing, renewing, or extending any type of federally backed loan, lenders are required to conduct a flood zone determination using the most current FEMA FIRM to determine if any part of the building is located in an SFHA. If the building is in an SFHA, the federal agency or lender is required by law to provide written notification to the borrower that flood insurance is mandatory as a condition of the loan. Even though a portion of the real property on which a building is located may lie within an SFHA, the purchase and notification requirements do not apply unless the building itself, or some part of the building, is in the SFHA. However, lenders, on their own initiative, may require the purchase of flood insurance even if a building is located outside an SFHA. Up to 25 percent of all NFIP flood losses arise from outside SFHAs (B, C, and X zones).

Under federal regulations, the required coverage must equal the amount of the loan (excluding the appraised value of the land) or the maximum amount of insurance available from the NFIP, which­ever is less.

How much flood insurance coverage is available?

Flood coverage limits for a standard flood policy