Is Private Flood Insurance Right for You?
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For decades, the federally backed National Flood Insurance Program has provided nearly all flood insurance in the U.S. — but these days, you may have other options. A growing number of private flood insurance companies offer coverage that may be more affordable or comprehensive than what you’ll get through the NFIP.
Here’s what you need to know about private flood insurance plus a few companies to consider.
But first, a note on terminology: The NFIP sells its policies through companies such as Allstate and Farmers. When we refer to “private flood insurance,” we mean policies that aren’t underwritten by the federal government and don’t have the same restrictions.
Private flood insurance vs. NFIP
Private flood insurance is a small but growing part of America’s flood insurance landscape. The NFIP’s total premiums added up to more than $3.2 billion in fiscal year 2022, according to Federal Emergency Management Agency data.
In comparison, private flood insurers accounted for nearly $769 million in premiums in 2022, the most recent year for which data is available, according to the Insurance Information Institute.
But the NFIP’s massive market share doesn’t mean it’s the best option for everyone. For example, the program’s coverage limits top out at $250,000 for the structure of your home and $100,000 for your belongings. These amounts may not be enough if you have a large home or expensive belongings.
Compare those limits with the offerings of a private insurer like Neptune Flood, which will cover your house up to $4 million and your belongings up to $500,000.
An NFIP policy won’t pay to repair a damaged swimming pool or replace items stored in your basement. Nor will it cover the expense of living in a hotel or rental if you have to move out for repairs after a flood. But these types of coverage may be available from private flood insurance companies.
Generally, neither the NFIP nor private flood insurers will cover flood damage to your car. For that, you’ll need comprehensive coverage on your auto policy.
Some private flood insurance policies come from surplus lines carriers. These are insurance companies that cover things standard insurers won’t. State regulators monitor surplus lines carriers to make sure they remain solvent.
However, surplus lines carriers don’t need to pay into a state’s guaranty fund the way standard, or “admitted,” insurance companies do. A guaranty fund will pay policyholders’ claims if an admitted insurance company goes out of business. If you have a policy with a surplus lines carrier that goes under, you won’t get the same protection.
Still not sure whether private flood insurance is right for you? Here are a few pros and cons to consider.
Pros of private flood insurance
Policies from private companies usually offer higher coverage limits than the NFIP maximums and often a broader range of coverage.
You may be able to get coverage more quickly. Private carriers often have a shorter waiting period than the 30-day federal window.
Private flood insurance may be cheaper for some homeowners. Learn more about how much flood insurance costs.
Cons of private flood insurance
If you drop NFIP insurance and buy private coverage, you may face a steep rate increase if you return to the NFIP.
Some private companies won’t insure all types of properties. For example, you might not be able to get a policy if you live in a mobile home or property that has had a past significant flood claim.
NFIP policies have the backing of the federal government, which could offer more security than a private company that could potentially go out of business.
Private flood insurance companies to consider
Below are a few widely available private flood insurance companies that may be able to cover your home. Note that these are just a starting point. An independent insurance agent may be able to help you find other alternatives in your area.
Aon Edge
The EZ Flood policy from Aon Edge covers your home’s structure up to $1.25 million and your personal belongings up to $875,000. You can add coverage for swimming pool cleanup, spoiled food and living expenses should you need to relocate during repairs. A 15-day waiting period applies unless you buy your policy as part of a loan closing.
The company claims it saves policyholders an average of 40% over NFIP coverage. EZ Flood insurance is available through agencies across the U.S., except in Alaska, Hawaii, Kentucky and Washington, D.C.
Chubb
Because Chubb specializes in coverage for high-end homes, its flood insurance policies go far beyond the NFIP’s offerings. You can insure your home’s structure and contents up to a combined total of $15 million, and the company will also pay for damage to personal possessions and built-in items in your basement. Policies include debris removal up to $250,000 and additional living expenses, if you have to temporarily relocate.
Chubb also covers things you might want to buy before a flood hits. The company will reimburse up to $5,000 for protective measures such as moving valuable items out of your home or putting sandbags around your foundation. Chubb offers flood insurance in 38 states plus Washington, D.C.
» MORE: Chubb home insurance review
Neptune Flood
Available in Washington, D.C., and every state except Alaska, Neptune offers a slick website where you can get a flood insurance quote within a few minutes. Neptune’s flood insurance can cover items an NFIP policy won’t, including damage to items in your basement, swimming pool refills and additional living expenses if you need to stay in a hotel while your home is repaired.
Its coverage limits are also significantly higher than the NFIP’s: up to $4 million for your home’s structure and $500,000 for your belongings. Coverage takes effect 10 days after you buy the policy — or immediately if you purchase it in conjunction with a mortgage.
Private Market Flood
Private Market Flood insurance is sold by The Flood Insurance Agency, which also offers NFIP policies. The policies are nearly identical, but the agency’s private flood insurance policy has higher coverage limits: up to $500,000 for the building and up to $250,000 for your belongings. The waiting period can range from zero to 14 days, depending on the circumstances.
Private Market Flood policies are available nationwide, except in Kentucky, New York, Washington, D.C., and Florida's Monroe County.
