NBP Insurance » Flood Insurance

New York State Flood Insurance

Let's say the river near your home overflows its banks after an excessive rainfall, causing severe damage to your home and its contents. Your homeowners insurance takes care of all related costs, yes or no? Answer: Not at all! Why? Because damages caused by floods are specifically excluded from all homeowners policies. You need to have a separate flood insurance policy in order to be covered.

Flood insurance is a very necessary coverage for those who live in flood prone areas, and even for those in low-to-moderate risk areas. However, it is important to understand that while homeowners insurance is designed to bring your home and its contents back to the same condition it was in before a loss, flood insurance is only meant to get you back on your feet.

In the not too distant past, flood insurance was unavailable because it was too costly for private insurers to offer. The national response to flood disasters was generally limited to constructing flood control works such as dams, levees, sea walls, etc. If you were a flood victim, the only recourse you had was the remote possibility of disaster relief.

In 1968, Congress established the National Flood Insurance Program (NFIP) with two objectives in mind. The first goal was to give property owners the opportunity to purchase insurance protection for flood losses. The second goal was to encourage communities to implement and enforce measures to reduce future flood risks in Special Flood Hazard Areas (SFHAs).

Today, individuals who reside in communities that make the effort to reduce flood risks can receive insurance as a financial protection against flood losses. And the government has been able to lower its financial risk by having local governments take responsibility and steps to limit the chances (and the resulting devastation) of floods.

By limiting development in areas of high flood risk and encouraging construction practices that help reduce the impact on structural damages, a community can protect its citizens against the high costs associated with flood disasters. The entire community benefits from effective flood area management: the risk of loss is lessened, the impact on property is decreased and property owners can purchase much needed insurance protection.