In This Article

Storms across North America are increasing in frequency and intensity making flood insurance a critical component of your risk management strategy that homeowners and businesses often overlook.

This article explains what’s involved in buying flood insurance for your home or business and how to find the right coverage for your property. The key topics covered include:

• Why Standard Homeowners Insurance Is Not Enough?
• What is the federal government’s National Flood Insurance Program (NFIP) managed by FEMA?
• Who Is Required to Buy Flood Insurance?
• What does flood insurance cover
• Comparing NFIP vs. Private Flood Insurance
• Why Work With an Independent Insurance Broker?
• What You Need to Know and Consider Before You Buy Flood Insurance
• Key Takeaways and Recommendations

NOTE: This article is for informational purposes only, and you should not consider it legal or professional advice. Every business’s situation is unique, and data privacy laws vary by state and industry. We strongly encourage you to consult with a qualified attorney and a licensed insurance professional before making decisions about your coverage or compliance obligations.

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Introduction

Flooding is one of the most common and costly natural disaster in the United States, and the greater Philadelphia region, including Chester County, Pennsylvania.

Hurricane Ida, in 2021, is a good example of the devastation caused by the flooding: More than 43,000 homeowners lacked adequate flood insurance and were forced to apply for federal disaster aid.¹

In Chester County, the Brandywine Creek surged to historic levels, flooding properties in Coatesville, Downingtown, and along waterways throughout the county.²

If you own a home or business, your standard insurance policy likely leaves you exposed to flood damage. This article discusses how flood insurance works, including federal and private options, what’s covered, what it costs, and how to choose the right protection for your property.

How FEMA Defines a Flood

Flood insurance is a specialized type of property insurance that covers physical damage to a building and its contents caused specifically by flooding. It is distinct from standard homeowners, renters, and business insurance policies, which typically exclude flood-related damage. 

By definition, flooding refers to an overflow of water that covers land that is normally dry. Floods are typically the result of:

• Heavy rain falls for a long period of time
• Rivers overflow their banks
• Snow melts quickly
• Dams break
• Storms cause ocean water to rise onto land (storm surge)

Floods can cause damage to homes, roads, and crops, and can be dangerous to people and animals.

Why Standard Homeowners Insurance Is Not Enough?

Most homeowners assume their existing policy covers flooding. It does not. Flood damage requires a completely separate insurance policy. According to FEMA, just one inch of standing water can cause up to $25,000 in property damage. Approximately 25 to 30 percent of all flood insurance claims come from properties located outside the FEMA-mapped floodplain, meaning flood risk is not limited to areas that sit directly on a river or in a designated high-risk zone.³

A lack of flood insurance coverage can be financially catastrophic when a major storm arrives.

For homeowners, renters, and business owners who experience a “sudden” backed up toilet or busted water pipe, often do have coverage through their home owners or renters policy. Other water events like a backed up sceptic tank or sewage system, require a special endorsement be added to your policy for coverage. 

What is the National Flood Insurance Program (NFIP)?

In 1968, Congress established the National Flood Insurance Program which is managed by FEMA with two goals:

1.      Make flood insurance available to property owners who might otherwise cannot get it

2.      To encourage communities to adopt floodplain management standards that reduce long-term flood risk.

Highlights of FEMA’s NFIP Flood Insurance

• Over 47 private insurance companies offer the NFIP through the Write-Your-Own (WYO) program, which is delivered by NFIP Direct.
• The data indicates there are approximately 4.7 million policyholders nationwide.
• Flood insurance is available to anyone in one of the 22,600-plus participating NFIP communities.
• The NFIP covers buildings, contents, or both.
• Renters can purchase contents-only coverage for personal items.
• Unless purchase is required by a mortgage lender there is a 30-day waiting period before an NFIP policy takes effect.

Who Is Required to Buy Flood Insurance?

Not everyone is required to purchase flood insurance, but many homeowners are. Homes and businesses in a Special Flood Hazard Area (SFHA), defined as a property with a 1% or greater annual chance of flooding, and that carry a federally backed mortgage, are legally required to maintain flood insurance.

Even if you are not legally required to buy flood insurance, doing so is strongly encouraged, particularly in the Philadelphia region where storm intensity is increasing.

What Does Flood Insurance Cover?

Understanding what is and is not covered helps buyers select the right policy.

Building coverage typically includes:

• The physical structure of the home or commercial building
• Foundations, walls, and staircases
• Electrical and plumbing systems
• Furnaces, water heaters, and built-in appliances
• Permanently installed carpeting over unfinished flooring

Contents coverage typically includes:

• Personal belongings such as clothing and furniture
• Portable appliances and electronics
• Certain valuable items up to policy limits

https://www.floodsmart.gov/get-insured/buy-a-policy#insurance-coverage

What flood insurance rarely or does not cover:

• Temporary housing or additional living expenses while your home is being repaired.
• Landscaping, decks, patios, fences, and swimming pools.
• Vehicles.
• Property outside the insured building, e.g., a shed.
• Financial losses caused by business interruption.

It’s important to note that the landlord’s flood policy covers the building structure, not your personal belongings. Contents-only coverage is available through the NFIP specifically for renters.

Coverage Differences between NFIP and. Private Flood Insurance

Property owners have the option of using the federal program or purchasing private flood insurance.

Feature	NFIP	Private Flood Insurance
Backed by	Federal Government (FEMA)	Private carriers
Coverage limits	Up to $250,000 building / $100,000 contents	Often higher limits are available
CRS discount eligibility	Yes	No
Availability	Any NFIP-participating community	Varies by carrier and location
Waiting period	Typically 30 days	Often shorter
Premium flexibility	Standardized rates	Maybe lower or higher, depending on the property

Private flood insurance makes for those buyers who need:

• Coverage limits above NFIP maximums
• Own higher-value properties
• Can leverage the private carriers better premiums for their specific location and risk profile.

Why Work With an Independent Insurance Broker?

For flood insurance, working with an independent broker offers distinct advantages over going directly to a single carrier.

Independent brokers can:

• Represent multiple NFIP-participating carriers under the Write-Your-Own program, so you benefit from their service and claims handling differences.
• Access the private flood insurance market and compare policies side by side with NFIP options.
• Advise on the mandatory purchase requirement.
• Explain how your property’s elevation factors into the premium calculation.
• Provide guidance on contents-only policies for renters.

Because independent brokers are not limited to a single insurance carrier, they prioritize finding the best fit for your property, your budget, and your risk exposure. Some other benefits of working with an independent broker for flood insurance include:

• Personal advocacy if you have a claim.
• Will do all the hard work to compare prices in the portfolio of carriers.
• Guide you through premium increases, if needed.

To sell flood insurance, your agent or insurer must participate in the National Flood Insurance Program. If your current agent does not offer flood coverage, you can contact the NFIP Referral Call Center at 1-800-427-4661 to find a participating agent in your area.

What You Need to Know and Research before You Buy Flood Insurance

Before purchasing a flood insurance policy, consider:

• Check your flood zone: Use FEMA’s Flood Map Service Center msc.fema.gov/portal/home to determine whether your property falls within a Special Flood Hazard Area.⁷
• Content coverage: If you want to cover your contents you will have to purchase a separate policy. Many policyholders insure the structure but not their belongings.
• Review quotes from NFIP and private policy options: An independent broker can pull quotes from both markets, so you can choose the option that best fits your situation.
• Renters need their own flood insurance policy: A landlord’s flood policy does not protect tenant belongings.
• Be Proactive: The standard NFIP waiting period is 30 days. If you purchase flood insurance after a storm warning, you will not be covered for that storm. If you need immediate coverage, you will have to work with an insurance broker and purchase from a private carrier.

Conclusions and Recommendations

Flooding is not a distant risk for Chester County and the greater Philadelphia area. It’s a recurring threat that has cost property owners millions of dollars in uninsured losses. The good news is that flood insurance is accessible, and for many buyers, is often more affordable than you think, particularly in communities that participate in FEMA’s Community Rating System.

The first step in purchasing flood insurance in Chester County is to have a conversation with your independent insurance broker. They can guide you through the process and explain how each of the factors listed below can impact your options and premiums; for both the federal program and the private market.

• Standard homeowner’s insurance never covers flood damage. A separate flood policy is required.
• The NFIP is the primary federal flood insurance program, delivered through over 47 private carriers and backed by FEMA. It is available to property owners, renters, and businesses in participating communities.
• Private flood insurance is an alternative that may offer higher limits or more competitive premiums depending on your property and location.
• Independent brokers have the unique ability to compare both NFIP and private market options, assisting you in finding the right policy without restricting you to a single carrier’s offerings.
• Do not wait. The 30-day NFIP waiting period means that flood insurance purchased during a storm watch offers no protection. The time to buy is before the water rises.

If you already have a flood insurance policy for your home or business, don’t forget to review before you renew!

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About the Author

Kevin Hamill, Certified Professional Insurance Agent

Kevin has over 14 years of experience helping families and business owners in Chester County, PA, navigate the complexities of risk management. 

After starting the Alliances Insurance Agency in 2014 (now AIA-Yerkes Insurance Agency) he built the firm on three principles: trust, service, and relationships, with the guiding principle that insurance should be a personalized strategy, not a generic commodity.

As a licensed insurance broker, Kevin has mastered the product offerings of 40 different insurance companies. He uses this expertise to deliver the best insurance product based on the risk profile of his clients, while optimizing both cost and coverage.

Kevin is a member of BNI, a networking group for business professionals, where he has lectured hundreds of times to members on his category of insurance products, including: Homeowners & Landlord Insurance, Renters & Condominium Insurance, Flood Insurance, Pet Insurance; Business, Home & Auto Umbrella Insurance; Auto Insurance, Motorcycle Insurance, Classic Car Insurance, RV Insurance, Boat & Watercraft Insurance; and Business Owners Insurance, Commercial Auto Insurance, Surety Bonds, Cyber & General Liability Insurance, Workers’ Compensation Insurance.