With hurricane season upon us, and the severe storms of the last few years fresh in our minds, property owners should think about whether they need flood insurance. Floods carry with them nature’s full devastating power and can destroy homes and lives in a matter of hours. Failure to carry proper and sufficient flood insurance can leave a family or business without the resources to recover. This article will address federal flood insurance, including what it covers and its limitations. It will also address when private flood insurance should be considered, either in addition to, or separate and apart from, federal flood insurance.

The National Flood Insurance Act

Congress passed the National Flood Insurance Act of 1968 (the NFIA) in part because “as a matter of national policy, a reasonable method of sharing the risk of flood losses is through a program of flood insurance which can complement and encourage preventive and protective measures.” Mudslide and flood-related erosion protection were later added to the National Flood Insurance Program (NFIP). In recent years, Congress passed a series of short-term reauthorizations of the act. On July 31, the Senate voted 86-12 in favor of a four-month extension of the act, hours before the NFIP was scheduled to expire. While the long-term future of the NFIP is uncertain, the millions of home and business owners in flood zones will continue to benefit from the NFIP at least through this year’s hurricane season.