NFIP vs Private Flood Insurance

National Flood Insurance Program

The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA) and is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses. In exchange, participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

Private Flood Insurance

Private flood insurance covers the structure of your home and its contents from water damage caused by a flood. What separates this option from the other type of flood insurance policies, is that it receives no backing from the federal government. Policies under the federal program are able to pay out flood damage claims for as long as the program receives funds.  Private flood insurers are for-profit companies that either rely on a reinsurer or on money collected from premiums to pay out damages to claimants.