Is There a Minimum Premium for a Flood Insurance Policy?

The National Flood Insurance Program (NFIP) offers floodplain management, flood hazard mapping and flood insurance to homeowners. A homeowner should understand what flood insurance is and the costs associated with coverage.

About Flood Insurance

A basic homeowner's policy does not include coverage for floods. Flood insurance covers damage from hurricanes, heavy rains and tropical storms. It provides coverage for the home and the contents. A homeowner who lives in a high-risk area with a mortgage must carry flood insurance.

Cost

Many factors determine the cost a homeowner pays for flood insurance premiums, such as the amount of coverage purchased, deductible, the design of the home, age and location. The flood insurance rate map shows high-risk and low-risk flood areas, which affect the cost of premiums.

Minimum Premium

All flood insurance policies have a minimum premium amount. This amount changes and, according to the Federal Emergency Management Agency, a homeowner should contact a local insurance company to receive current information on minimum premium amounts. A premium for a homeowner with a preferred risk policy can be as low as $119 as of June 2010.

References

• FEMA: Answer to Questions About the National Flood Insurance Program
• Federal Citizen Information Center: National Flood Insurance Guide
• National Flood Insurance Program: Coverage From NFIP
• National Flood Insurance Program: Policy Rates