The Flood Disaster Protection Act requires the purchase of flood insurance to receive federal or federally-backed insurance for acquisition and/or construction of buildings in an SFHA. Homeowner's insurance does not cover flooding; therefore, a separate policy must be purchased.
Under the recently enacted National Flood Insurance Reform Act, the lender is legally responsible for determining if a flood insurance policy is required for a loan. Coverage may be purchased for both the building and its contents. Residences can be insured for up to $250,000 for the building and $100,000 for the contents. Because content coverage is separate, renters can also ensure their belongings up to the same amount. Non-residential buildings can be insured for up to $500,000 for the building and $50,000 for the contents. Since these figures can vary, check with your insurance company for further details.
If you are not in an SFHA and you wish to purchase flood insurance, a Preferred Risk Policy (PRP) is available at a discounted rate. Because these policies already have the lowest premium possible, the CRS discount will not apply. PRP Coverage limits may be $250,000 for the building and $60,000 for the contents.