Flood: Understanding and Recovering from One of Nature's Worst Disasters



...that has been removed when threatened by any other peril.

There is also limited coverage for loss mitigation measures such as sandbags, fill for temporary levees, pumps and wood materials used to save a building endangered by flood.

Property Not Covered

There is a lengthy list of property that is not insured under the flood policy. Many of these items are standard to general property coverages — accounts, bills, currency, valuable papers or records, animals, aircraft, most motor vehicles and watercraft, among others. Exclusions unique to flood policies include property located in basements. These exclusions are detailed later in this article.

How Flood Damages are Valued

The value of flood damage in the Dwelling Form is based on either replacement cost value or actual cash value. (Manufactured or mobile homes are subject to a special loss settlement provision.) Replacement cost value (RCV) is the cost to replace that part of a building that is damaged (without depreciation). To be eligible, conditions that must be met are:

Actual cash value (ACV) is replacement cost value at the time of the loss, less the value of its physical depreciation. The repairs/ replacement must be completed before the withheld depreciation is paid. (They are paid the ACV regardless.)

Some building items such as carpeting are always adjusted on an ACV basis. For example, wall-to-wall carpeting could lose between 10-14 percent of its value each year, depending on the quality of the carpeting. This depreciation would be factored in the adjustment.

Personal property is always valued at ACV.

NFIP Insurance: Is Coverage Provided at Replacement Cost?

Coverage is provided only for single-family dwellings and...

Emergency Program

Insurance Limits

$ 35,000 3 $ 35,000 3 $100,000 4 $100,000 4

$ 10,000 $100,000

Regular Program

Basic Insurance Limits

Additional Insurance Limits

Total Insurance Limits

Total Amount of Insurance Available

Building Coverage

Single-Family Dwelling
Two-to Four-Family Dwelling
Other Residential

Contents Coverage


$ 50,000 $200,000 $250,000 $ 50,000 $200,000 $250,000 $150,000 $100,000 $250,000 $150,000 $350,000 $500,000 $ 20,000 $ 80,000 $100,000 $130,000 $370,000 $500,000