The National Flood Insurance Program, created by Congress in 1968 and managed by FEMA. Its policies are sold through agents and insurance companies in communities that take part in the program.

Does NFIP flood insurance pay for a hotel if I can't live at home?

No. The standard NFIP policy excludes additional living expenses and loss of use. Some private flood policies include it, so check the policy.

Can I switch from NFIP to private flood and back?

You can, but ask first. In Florida, an agent must have you sign a notice before moving you off the NFIP, because if your NFIP rate is subsidized, the full risk rate may apply if you come back (Fla. Stat. 627.715(8)).

NFIP vs private flood insurance — From Elona’s desk

Q: Will my mortgage lender accept private flood insurance?

Federally regulated lenders must accept a private flood policy that meets the federal definition of private flood insurance, including coverage at least as broad as the standard NFIP policy (42 U.S.C. 4012a(b)).

The NFIP is the federal flood insurance program, with the same rules and coverage caps everywhere. Private flood insurance comes from insurance companies that write their own terms. Neither is automatically better. The right one depends on your home and what you need covered.

Here’s how I compare them for clients.

The NFIP in plain words

Congress created the National Flood Insurance Program in 1968, and FEMA runs it. You buy an NFIP policy through an agent or an insurance company, but the coverage itself follows one standard federal policy. That’s its biggest strength: the rules are written down and the same for everyone.

It also has fixed limits. For a home of one to four families, federal law caps NFIP coverage at $250,000 for the building and $100,000 for contents. You can only buy it if your community takes part in the program.

What the standard NFIP policy leaves out

These are the gaps people are most surprised by:

No living expenses. If a flood forces you out while repairs happen, the standard NFIP policy doesn’t pay for a hotel or rent. It excludes additional living expenses and loss of use.
Limited basement coverage. In a basement, building coverage is limited to a list of items like the furnace, water heater and electrical panel, plus cleanup. Contents there are limited to a few things, like a washer, dryer and freezer.
Contents at actual cash value. Belongings are paid at their depreciated value, not what it costs to buy new.
A 30-day wait. New NFIP policies usually take effect 30 days after you apply and pay, with a few exceptions. More on the wait.

What private flood insurance can look like

Private flood policies are written by insurance companies, and each one has its own terms. Depending on the policy, that can mean:

Building or contents limits above the NFIP caps.
Additional living expenses if you can’t live at home.
Replacement cost for belongings.
A different waiting period from the NFIP’s.

It can also mean less. A private policy might cover fewer things, or let the insurer cancel or decline to renew on its own terms. That’s why I read the policy itself, not the brochure.

If you have a mortgage

Your lender doesn’t get to insist on the NFIP. Federal law requires federally regulated lenders to accept a private flood policy that meets the federal definition of private flood insurance. That definition includes coverage at least as broad as the standard NFIP policy.

Using both

Some people keep an NFIP policy and add an excess or supplemental flood policy above it, for higher limits or for things the NFIP excludes. It’s worth asking about if your home is worth more than the NFIP caps.

Florida

In Florida

Florida law sets out the kinds of private flood policies insurers can sell here: standard (matching the NFIP policy), preferred (which adds additional living expenses and replacement cost on contents), customized, flexible, and supplemental (Fla. Stat. 627.715). Flood limits and deductibles have to be shown prominently on the declarations page.

If you have an NFIP policy and you’re thinking of moving to a private one, an agent has to give you a written notice to sign first. It tells you that if you leave an NFIP policy written at a subsidized rate, the full risk rate may apply if you ever want to come back. Read it before you sign.

If you’re with Citizens Property Insurance, the flood policy it requires can be from the NFIP or a private insurer, as long as it meets the minimum the law sets (Fla. Stat. 627.351(6)(aa)).

Illinois

In Illinois

The Illinois Department of Insurance notes that flood insurance is available from a variety of insurance companies as well as the NFIP, as long as your community participates in the federal program. Since so many Illinois homes have basements, read the basement section of any flood policy carefully, and ask whether you also need a water backup endorsement on your home policy for drains and sump pumps.

Good to know

Compare the same things. Building limit, contents limit, deductible, living expenses, basement wording and waiting period, line by line.
Don’t let coverage lapse when you switch. Line up the new policy’s start date before you cancel the old one.
Keep the declarations page. It’s the proof your lender, or Citizens, will ask for.

Want me to compare them for you?

Upload your current flood or home declarations page at /quote/, or send it to me. I’ll put an NFIP option and private options side by side, explain where they actually differ for your home, and help you choose.

Talk to Elona

NFIP vs private flood insurance