Flood Insurance — NFIP and Private Flood

Flood is always a separate policy.

No homeowners, dwelling fire or commercial property form pays for rising water — and on most files the lender is the one who says so, days before the closing.

Cennairus is a licensed wholesale insurance broker: retail agents send us the accounts their own markets cannot place, stay the agent of record, and we take each account to the markets on our panel of 145 carriers that write it. Flood insurance covers water rising from outside, such as an overflowing river, storm surge or a downpour the drains cannot take, which homeowners, dwelling fire and commercial property forms all exclude. Building and contents are bought separately, and a new policy generally takes effect thirty days after purchase. Cennairus quotes the federal program and the private market together.

Separateno property form covers rising water

Two roadsthe federal program and private flood

30 daysthe waiting period, raised first

Yoursyou keep the client

What you get

Both roads, one submission

The federal program and the private market are quoted off the same file, so the client chooses between two real answers instead of taking whichever one got asked for first.

The waiting period, checked first

A new flood policy generally does not take effect for thirty days. The exceptions are narrow — a loan closing is the usual one — so the effective date is measured against the calendar before terms go out, not after the client has signed.

Above the program’s ceiling

The federal form’s maximum limits are fixed by statute. Where the building is worth more than that, private flood can often write above it, and take contents and business income more broadly than the program does.

A broker who reads the zone file

Flood zone, the elevation certificate where one exists, first-floor height, foundation type, prior flood losses, and whether the community takes part in the federal program — worked by hand before the submission goes out.

How do I quote flood through Cennairus?

Send the address, not a guess

The address decides the zone. Add the elevation certificate if the client has one, the foundation type, any prior flood loss, and whether the building, the contents or both need covering.

Both roads are worked at once

The federal program option and the private alternative are priced off the same facts, and a licensed broker answers what each side asks instead of handing the questions back to you.

Terms come back with the date on them

Premium, what the building side and the contents side each pay for, and the day the cover actually starts once the waiting period has been counted.

What does flood insurance not pay for?

Everything that is not rising water Fire, wind, theft and a pipe bursting inside the building stay on the homeowners, dwelling fire or commercial property policy. Flood answers for water that comes in from outside and rises.

The finished basement Below the lowest floor the cover narrows hard: the foundation, the stairs and the equipment that keeps the building running, and very little of what is finished or stored down there. Worth saying before the client finishes the basement, not after.

Earth movement A landslide or a sinkhole is not a flood, however wet the ground was, and shake damage belongs on an earthquake policy. Mudflow is the one piece of moving ground the federal program does treat as flood.

The car in the driveway A flooded vehicle is a comprehensive claim on the personal auto or commercial auto policy, never on the flood policy.

What the business stops earning Business income sits on the business owner’s policy or the commercial property policy for every other peril. The federal flood program pays nothing for lost income, or for somewhere to live while the building dries out — where the account needs that, it has to come from a private flood form.

What does a flood policy cover?

Flood is water that rises from outside — an overflowing river, storm surge, a downpour the drains cannot take — and it is excluded from virtually every standard property form. A pipe bursting inside the building is a different peril, and usually a covered one on the property policy.

There are two coverages, and they are bought separately: building coverage for the structure, its foundation and the equipment that runs it, and contents coverage for what is inside. A tenant can buy contents alone; a landlord usually insures the building alone.

The National Flood Insurance Program (NFIP) writes one standard federal form, in almost any community that takes part in it, with maximum limits fixed by statute. Contents are settled at actual cash value, replacement cost on the building is reserved for a primary residence insured close to what it would cost to rebuild, and the building side carries an allowance for bringing a substantially damaged building up to the local floodplain rules.

Private flood is not one form. These markets can often write above the program’s limits, take contents and business income more broadly, and set their own waiting period instead of the program’s. What each of them will do is decided market by market, on the address.

A new policy generally does not start for thirty days, and the narrow exceptions are mostly a loan closing — which is also why most flood files exist, because a federally regulated lender has to require the cover on a building inside a mapped high-risk zone. Outside that zone nobody makes the client buy it: the map draws a lending requirement, not the edge of the water.

Who buys it: homebuyers closing inside a mapped high-risk zone, because the lender has to require it; owners outside the zone who want the cover anyway; tenants insuring contents only; landlords insuring the structure of a rental; commercial building owners near a floodplain or a coastline; investors buying in a coastal or riverfront market; anyone renewing after a prior flood claim.

Flood, answered

Does a homeowners policy ever cover flood?

No. Rising surface water is excluded on homeowners, dwelling fire and commercial property forms alike, which is why flood is written as its own policy every time. Water from a pipe bursting inside the building is a different peril, and usually a covered one on the property policy.

When does a new flood policy take effect?

Generally thirty days after it is bought. The exceptions are narrow, and the usual one is a policy bought in connection with a loan closing. Ask for the closing date along with the address, before the client signs anything.

Where do the federal program and private flood part company?

The National Flood Insurance Program writes one standard form, in almost any community that takes part, with maximum limits fixed by statute. Private markets can often write above those limits, take contents and business income more broadly, and set their own waiting period instead of the program’s. What each will do is decided market by market, on the address, so we quote both rather than assume.

Does a property outside the mapped zone need it?

Outside the high-risk zone a lender will not require it, so there it is a recommendation rather than a mandate. The map draws a lending requirement, not the edge of the water, and property outside the mapped zone floods too.

Does flood cover a finished basement?

Only narrowly. Below the lowest floor the program pays for the foundation, the stairs and the equipment that keeps the building running, and for very little of what is finished or stored down there. It is the most common surprise on this line.

What do you need to shop it?

The address and the flood zone, the elevation certificate where one exists, first-floor height and foundation type, any prior flood loss, and whether the building, the contents or both need covering. For the federal program, whether the community takes part in it.