Flood insurance is one of the most misunderstood insurance products and is one that many people try to avoid purchasing. But the fact remains that rivers rise, waves surge and water will find its way onto your property and into your home. So, it is important to learn the facts behind flood insurance.

First, a True Story

One of our long-time insurance customers purchased a house in East Falmouth in 2013. A review indicated the entire property was outside the flood hazard area, so no flood insurance required by mortgage lender. In 2014, the National Flood Insurance Program (NFIP), a program created by Congress to share the risk of flood losses through flood insurance and to reduce flood damages by restricting floodplain development, updated its official Flood Map. On the new map the back yard of the East Falmouth property was in a flood area, but not the house.

In 2018 the insured’s bank sold the mortgage it held on the home to another bank. The new bank had an out-of-state review company look at all the mortgages purchased. That company determined that so long as a part of the land was in a flood hazard area, the entire property required flood insurance. The cost was estimated at $6,340 per year. But in this case the bank actually put in place so-called “forced placed” coverage on the property at a cost of $8,700 per year. Yikes! But wait, there was a solution…

We recommended that our insured customer secure an Elevation Certificate on the dwelling.  We thought the certificate would show that the home structure was completely outside the flood hazard area. It was necessary for us to submit this certificate to NFIP for acceptance. Only when this was processed was it accepted by the bank. Unfortunately, the bank did not refund the cost of the previously purchased “forced placed” coverage.

Incidentally, our customer decided to purchase “regular” flood insurance anyway, but at a significantly reduced cost.    

What is a Flood?

In simple terms, when water is on or in the ground it is considered flood water. Rain does not count. The National Flood Insurance program (NFIP) defines a flood1 two ways:

1. A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is your

property) from:

a. Overflow of inland or tidal waters,

b. Unusual and rapid accumulation or runoff of surface waters from any source,

c. Mudflow.

2. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined in A.1.a. above.

If you own or are considering a property in a flood hazard area and need a mortgage, your lender will almost certainly require flood insurance. The NFIP usually has a maximum amount of coverage they will issue ($250,000 on building). Banks are required to accept this limit. Even with a $250,000 limit the cost of flood insurance can be extremely high. Further, NFIP is in the process of increasing coverage rates in order to reduce the deficit it incurs every year due to flood losses.

Do You Need Flood Insurance?

If you think your property may be subject to flooding, you should consider purchasing flood insurance. For example, if you have a home or vacation home along the seashore or tidal inlets, or there is a river or other body of water nearby. There are several markets that will provide flood coverage. However, the more susceptible your home is to a flood, the more complicated and expensive it will be to purchase flood insurance.  

Flood maps are used to determine which properties are in “flood zones” and prone to potential flooding. These flood zone maps are made via two general methods: proximity to flood source; and elevation. These factors are determined using measurements, usually via satellite or overhead photography. Due to the technology used, often flood maps do not tell the entire story of your property. 

Reducing Flood Insurance Costs

There are several reasonable methods to reduce flood insurance costs:


  1. The Eyeball Test.  If your property looks higher than where flood waters may accumulate it probably is higher and you should look into options. It is a no cost assessment that may be able to tell you a great deal about your property.


  1. Elevation Certificate:  A local civil engineer can provide an exact measurement of your property relative to the accepted local flood hazard elevations. If your property is above the flood hazard area your costs can be reduced or eliminated. An Elevation Certificate is good basically forever, although flood hazard elevation standards by change over time as communities are re-rated by the NFIP.    


  1. Letter of Amendment: If you have a favorable Elevation Certificate, with just a little more work by the civil engineer you might secure a Letter of Amendment of the Flood Map.  The NFIP officially recognizes that flood maps may need “amendment” for individual properties. That is, your property could be officially designated as outside the flood hazard zone. While not a permanent waiver, this option is an excellent method to secure long term relief from flood insurance requirements.    

Your Next Step

You don’t want to get caught paying for flood insurance you do not need like our customer in East Falmouth. But you also don’t want to be unprepared should a flooding incident occur. Even if your home is not in an NFIP designated flood hazard zone, you might want to consider flood insurance, for the simple reason that most homeowners insurance policies specifically exclude the peril of flood.

With climate change occurring at an increasingly dramatic pace, water damage from flooding may become a threat in areas that have previously been deemed safe. A Preferred Flood Policy is very inexpensive and will pick up the excluded peril of flood, and many policies include the massive clean-up costs that follow a catastrophic flood incident.

Contact Bearce Insurance with Your Flood Insurance Questions


To learn more about flood insurance and how we can help you please contact us locally at 508-586-3400 or toll-free at 800-498-9900, or request a convenient online quote.


  1. Copyright & Source Standard Flood Insurance Policy – NFIP