Jordan Olson

Mar 18 2015

Understanding Flood Insurance

Understanding Flood Insurance

Flooding has long been the costliest and most devastating disaster in the United States. Ninety percent of all presidentially-declared disasters involve flooding. However, homeowner insurance policies do not cover flood damages. Spring showers are just around the corner – learn why flood insurance is an important part of protecting one of your largest assets.

Who has to get flood insurance?
The National Flood Insurance Program (NFIP) under the jurisdiction of the Federal Emergency Management Agency (FEMA) has mandated that any property located within a Special Flood Hazard Area (SFHA – a property with a 1% chance of flooding annually) must maintain flood insurance coverage for the duration of their mortgage. The NFIP requires all federally regulated lending institutions like Hills Bank to enforce the mandatory flood insurance purchase requirement for properties located in SFHAs. While flood insurance is not required by law on non-SFHA properties, NFIP policies are available for anyone to purchase, regardless of what flood zone they are located in.

What is a flood zone and who determines if my property is in one?
FEMA draws maps which rate a community’s chance of flooding. Properties are rated within zones:

  • Zone A properties (SHFA) have a 1% chance of flooding annually and require flood insurance by law. Zone A properties are sometimes referred to as the 100 Year Flood Plain.
  • Zone X properties have a 0.02% chance of flooding annually and are sometimes called the 500 Year Flood Plain. Zone X properties do not require insurance by law, but that doesn’t mean we couldn’t experience another 500 Year Flood like Eastern Iowa experienced in 1993 and 2008.

What are my chances of actually flooding?
If you live in a SFHA, you have a 26% chance of flooding at least once in the lifetime of your 30-year mortgage. Even if you live outside a SFHA, your property is still at risk for flooding. According to statistics taken from NFIP’s Mandatory Purchase of Flood Insurance Guidelines publication, over 25% of NFIP flood disaster claims are from non-SFHA properties.

How do I purchase flood insurance?
The NFIP offers subsidized flood insurance policies. Almost all insurance agents are able to write one of these policies for your property. Flood insurance policies are based on the Flood Insurance Rate Maps produced by FEMA; therefore two flood insurance policies with the same rating will have the same premium, no matter who writes the policy.
Just remember, there is a 30 day wait period before flood insurance goes into effect, unless you are purchasing it as part of a loan transaction.

Can I have my home reevaluated and potentially removed from a SFHA?
If you believe that your property is sufficiently elevated, you can hire an engineer to survey your property. Based on the elevation of your property, the engineer can submit a Letter of Map Amendment (LOMA) to FEMA and request that the property be removed from the SFHA. There are a number of excellent engineering and surveying companies in Eastern Iowa. If you believe your property might be eligible for a LOMA, we recommend researching the various options in your area to find a company that best suits your needs.

To learn more about flood insurance requirements, download these frequently asked questions about flood insurance. Please feel free to call 1-800-445-5725 (1-800-HILLSBK) or email to speak to a representative in our flood department and they will be happy to answer any questions you may have.

Insurance products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.
Jordan Olson

About Jordan Olson

Jordan Olson is a Loan Servicing Supervisor at Hills Bank. She has been at Hills Bank since 2014 helping customers with their flood insurance compliance needs. Jordan grew up in Des Moines, IA and went on to graduate from Iowa State University. Jordan can be reached at

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21 Responses to Understanding Flood Insurance

  1. Wally West says:

    This is really great information Jordan, thank you for sharing. I am going to be moving into an area that has a history of flooding and I think that it would be in my best interest to get flood insurance. I was not sure where to get that insurance, so thank you for saying that the NFIP can get me that. I would have spend hours searching for that information.

  2. Caleb Hart says:

    I need to get some flood insurance as well. My dad always taught me that it’s better to have something and not need it, than need something and not have it. I’m not sure how prone to flooding my area is. We just moved here and we’re just trying to get prepared.

    • Jordan Olson Jordan Olson says:

      Hi Caleb, thanks for reading! Please feel free to call us at 1-800-445-5725 (1-800-HILLSBK) or email and we’d be happy to answer any questions and help you prepare for your move to the area. Thanks for reading!

  3. Jim says:

    We picked the worse place to pick to build our home. There have been 5 floods in the past 3 years. I think it is about time for us to get flood insurance. It is crazy to think that we didn’t get it when we first moved in.

    • Jordan Olson Jordan Olson says:

      Hi Jim, I know a lot of people that feel the same way. I’m happy to reach out and help direct you to some options for flood insurance. Be on the lookout for my email!

  4. I’m worried about all of this weather we’re getting. Summer here, and it rains too much for me not to be looking into flood and homeowners’ insurance. How much can I expect to pay for this type of insurance?

    Alex Jennings |

    • Jordan Olson Jordan Olson says:

      Thanks for taking the time to read Hills Helps, Alex! It’s good to think ahead about obtaining a flood insurance policy because there is a 30-day wait period before the insurance goes into effect, unless it’s a part of a loan transaction. Flood insurance policies are based on FEMA Flood Map ratings, so flood insurance premiums can vary greatly depending on your property’s risk of flooding. The best way to determine the cost is to speak to an insurance agent and get a quote for your property. Since flood insurance policies are subsidized by the National Flood Insurance Program, most insurance agencies will give you nearly identical quotes, so your homeowner’s insurance carrier is a great place to start.

  5. Callie Marie says:

    I recently learned that most homeowner insurance policies don’t cover floods. It’s interesting that flood zones include any areas with a 1% chance of flooding a year. That doesn’t sound like a lot, but I guess if you live there for 30 years, that makes it a 30% chance. Thanks for the great information, I wonder how close I live to a flood zone.

    • Jordan Olson Jordan Olson says:

      A lot of homeowners are unaware that their regular insurance policy doesn’t cover flood damages. If you are curious to see where your property lies in relation to the Special Flood Hazard Area, FEMA has a great resource on their website that allows you to view the flood maps. If you search your address on FEMA’s Flood Map Service Center ( and then select “Interactive Maps” which takes you to a page that allows you to view map overlays of the flood plains on satellite images. Please feel free to contact me if you have any other questions about flood insurance. Thanks for taking the time to read and comment on the post!

  6. I really appreciate you talking about this Jordan, and helping me understand flood insurance a little bit more. There was a pipe that burst in my brother’s basement the other day, and it flooded his whole basement. He is really worried that he is going to have to pay for all the damages himself. I’ll make sure I talk to him about this information that you gave. And I am sure once he knows about this, it will ease some of this stress.

    • Jordan Olson Jordan Olson says:

      Hi Brandon! Thanks for taking the time to read and comment on HillsHelps! This is a really common question for many homeowners. Flood insurance only covers damages from natural flooding events, like the rivers flooding or mudslides. Water damages from equipment malfunctions, such as a pipe bursting or sump pump going out, are actually covered by the homeowner’s hazard insurance policy, so your brother should submit this claim through his hazard insurance company.

  7. Deanna Jones says:

    Thanks for the tips! I was debating whether I should get flood insurance. A few friends of mine told me that everyone should have flood insurance, but I’m not sure if I should pay for it if flooding isn’t usual in my area. It’s good to know that there’s a way to determine whether an area is in a flood zone so that I can find out if it’s something I really need to have in my homeowners insurance. I should find out if my house counts as a Zone X property since they have a .02% chance of flooding every year.

    • Jordan Olson Jordan Olson says:

      You’re welcome Deanna. It is always a good idea to look into what classification your property falls under and from that determining whether Flood Insurance is for you. The best place to find which zone your property is rated is to ask your homeowners insurance provider to pull a flood determination, or check out the interactive maps at FEMA’s online Flood Map Service Center. Thank you for reading Hills Helps!

  8. My parents live in Florida, so they thought they should get flood insurance. Hopefully they don’t get a flood, but it’s good to have just in case. What is the price of flood insurance compared to normal home insurance?

    • Jordan Olson Jordan Olson says:

      The cost of flood insurance is entirely dependent upon in which flood zone a property is rated. If your parents live in a Special Flood Hazard Area, their flood policy could be more expensive than what they pay for homeowner coverage, but if they live in a low-risk zone it could be significantly less expensive. To provide a quote for flood insurance, agents have to determine in which zone a property is rated, so by speaking to an insurance agent, your parents would not only learn what their premium would be, but what their flood risk is. Thanks for reading Hills Helps!

  9. Steve Holt says:

    Thanks for posting this! I live in an area that’s a high risk flood zone, so flood insurance is definitely a must. Now that I own my own house, I find myself looking for the best flood insurance coverage that I can get. Your information about how the flood insurance rates written by FEMA will have the same policy will really help make it easier for me to find the right policy. I wasn’t aware that those policies that have the same rating will always have the same premium, even if someone different writes the policy. That’s good to know so that I won’t have to compare policies that have the same rating to find out if they will also have the same premium.

  10. Lily de Grey says:

    Great article, Jordan! I’m glad that I stumbled upon it because I’ve been thinking about getting flood insurance. I think you’re absolutely right: it’s important to have insurance if you live in a Zone A property. I’ll be sure to purchase some right away. Thanks for the great tips!

  11. Thanks for the information about flood insurance. I grew up in the Northwest were we got a ton of rain each year. We even lived near a lake and we had more than a couple of floods in our area while growing up. Flood insurance can be an important aspect of your homeowner’s insurance, depending on the region and climate you live in.

  12. Maggie Allen says:

    Wow, I had no idea that a “Special Flood Hazard Area” is an area that has as little as a 1% chance of flooding each year. That’s really nice, especially since it is ensuring that no homeowners find themselves without coverage if one actually occurs. Even if my home was engineered to be protected against flooding, I think I would still want the insurance. After all, if it is in a SFHA, then that means that there is still some chance that one could occur. It’s better to be safe rather than sorry, especially when it comes to protecting your home.

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