Flood Insurance Eligibility
Everyone in the United States is eligible for either flood insurance through the National Flood Insurance Program (NFIP) or a private insurer. Consumers may purchase flood insurance to cover residential or business properties. Insurers offer residential policies for homeowners or renters.
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NFIP Residential Flood Insurance
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NFIP offers three levels of flood insurance to residential homeowners and renters in participating communities - contents only, building only, or building and contents. These policies come at reduced policy rates than private insurers. According to federal law, residents in high- and coastal high-risk flood zones in NFIP-participating communities must purchase flood insurance. Purchase is optional to those in low- to moderate-risk flood zones.
Private Residential Flood Insurance
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Consumers not living in a NFIP-participating community may purchase flood insurance from private insurance companies. Those living in NFIP-participating communities may purchase excess flood insurance from private insurers, if they desire coverage above the $250,000 NFIP maximum policy. Policies from private insurers can cost three times as much as NFIP policies. Eligibility related to coverage levels varies by insurance companies.
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NFIP Business Flood Insurance
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NFIP offers three levels of coverage for commercial policies - contents only, building only, or building and contents. In low-to-moderate risk flood zones, it offers two levels of coverage if the property qualifies for preferred rates - contents only or building and contents. According to NFIP, eligibilty for preferred risk policy rates extends to all nonresidential buildings in low-to-moderate risk flood zones, including nonresidential condominium buildings. Consumers may only insure individual nonresidential condominium units under a contents only policy.
Private Business Flood Insurance
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Business owners not in NFIP-participating community may purchase commercial coverage from private insurance companies. Those living in NFIP-participating communities may purchase flood insurance in excess of the NFIP maximum of $500,000. Like private residential policies, the premiums run about three times the cost of NFIP insurance. Eligibility related to coverage levels varies by insurance companies.
Considerations
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Determine how much of the replacement and rebuilding cost you can afford to absorb to determine both your deductible and the amount of excess flood insurance needed, if any. For instance, if you have a home worth $1 million in a coastal high-risk zone in an NFIP-participating community and want the full amount of your home and its contents covered, you'll need the maximum $250,000 NFIP policy and an excess flood insurance policy from a private insurer for $750,000. NFIP residential policies are available with deductibles ranging from $1,000 to $5,000. Private insurer policies deductibles vary by company. You will have a deductible for each policy purchased. (
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