Private Flood Insurance vs. FEMA Flood Insurance: What’s the Difference?


By Julie A. Martin

There are two types of personal primary flood insurance in the State of Florida. One is FEMA Flood insurance, in which a standard carrier will offer you up to $250,000 on the Dwelling and up to $100,000 in Contents. Those are the maximum flood limits that the Federal Emergency Management Agency will allow on a policy issued under the National Flood Insurance Program.

If you have a FEMA flood policy, you have two deductibles, one on the Dwelling and one on the Contents. FEMA has a standing rule that if you go more than 30 days without flood coverage, and you wish to purchase a new flood policy through NFIP, there will be a 30-day wait after binding until the coverage becomes effective.

What if the total insurable replacement cost of your home is more than $250,000? What happens if there is a flood and you have only the $250,000 with which to cover your home in the event of a flood loss, such as happened last year with Hurricane Ian? FEMA also has excess flood insurance available, but it’s not easy to get. Several carriers have stopped writing excess flood in certain areas of the state, and those with NFIP policies have a coverage gap that may cost them in the event of a flood.

Private flood insurance offers more comprehensive coverage and is specifically designed to give you the amount of insurance you need in order to protect your home, which is one of the most important, and expensive assets, you will ever have. Private flood will often offer limits as high as $4 million on the Dwelling and up to $500,000 in Contents.

There is one deductible for the loss itself, rather than separate deductibles for Dwelling and for Contents. Private flood also offers an endorsement for Additional Living Expenses, which National Flood Insurance policies do not offer. Private flood coverage may also be more expensive than NFIP flood insurance, but it covers more of your home than NFIP does. Another advantage to Private flood is that if you don’t have flood insurance right now, but you need to get insurance quickly, Private flood has only a 10-day wait, rather than the 30-day wait required by FEMA when there is a lapse in coverage.

Which option is the best for you depends on the size, quality and total insurable replacement cost of your home. Your agent is best suited to help you determine the total insurable replacement cost of your home by performing a Replacement Cost Estimator, using your square footage, year built, roof type, roof shape, number of bedrooms and bathrooms, flooring types, etc. If your replacement cost is more than $250,000, you may wish to consider Private flood as a viable option in order to avoid a gap in coverage. If your home is smaller, the National Insurance Flood program might be the best option for you.

Whichever option you choose, it is important to have flood insurance in Florida, as we live on a peninsula surrounded on three sides by the ocean or Gulf of Mexico. If you believe your home is not in a flood zone, I must remind you dear reader, water doesn’t know that.