Answers about Flood Insurance

The bank force placed flood insurance on my property. What is the amount of insurance required to be placed?

The amount of insurance coverage required under the Flood Disaster Protection Act (FDPA or Act) is the same regardless of how the insurance is placed.  The minimum amount of flood insurance necessary to meet the Act’s requirement is the lesser of:

  • The outstanding principal balance of the loan(s), or
  • The maximum amount of insurance available under the National Flood Insurance Program (NFIP), which is the lesser of:
    • The maximum limit available for the type of structure, or
    • The insurable value of the structure.

For single-family and two-to-four family dwellings and other residential structures located in a participating community under the regular program, the maximum amount of flood insurance available is $250,000.  For non-residential buildings, the maximum amount of flood insurance available is $500,000.

Lenders, however, are permitted to require more flood insurance coverage than the minimum required by the Act.

February 2011