Flood Insurance Options for Pennsylvania Homebuyers

The Pennsylvania Insurance Department reminds everyone that flood insurance remains available in Pennsylvania despite the federal shutdown, which has resulted in the National Flood Insurance Program’s temporary loss of authority to renew or issue new flood insurance policies.

According to the National Association of Realtors®, one of the most immediate impacts of the federal shutdown is the lapse of the NFIP, which supports approximately 4.7 million policies and backs $1.3 trillion in coverage nationwide. The NFIP‘s inability to issue new policies is complicating an estimated 1,400 property transactions each day, leaving many buyers in high-risk flood areas unable to obtain flood insurance before closing on their homes.

Pennsylvania Insurance Commissioner Michael Humphreys said, “We want to make sure Pennsylvanians know that they still have strong, reliable and affordable options for protecting their homes through private flood insurance while the NFIP remains unable to write new or renewal business. It’s important to remember that if it rains, it can flood, and flooding can happen anywhere in Pennsylvania. The current private flood insurance market can provide consumers with choices to ensure they’re not left unprotected when floods strike.”

Pennsylvanians can continue to purchase private flood insurance through:

• Licensed insurance companies: The Pennsylvania Insurance Department reviews and approves these insurers’ policy forms and rates.
• Surplus lines insurers: While not licensed in Pennsylvania, these insurers are licensed in other states and authorized to sell policies here through licensed surplus lines brokers. These policies are legitimate, widely used and often provide competitive pricing compared to NFIP coverage.

Many Pennsylvanians may find that private flood policies offer broader coverage and, in some cases, lower premiums than NFIP policies.

Several well-established companies actively sell private flood insurance in Pennsylvania. More information to help Pennsylvanians find coverage is available on PID’s Flood Insurance webpage.

What Homebuyers and Homeowners Should Do

• Homebuyers: Pennsylvanians whose lenders require flood insurance can often meet this requirement through private flood policies. Speak with your lender and insurance agent early in the process.
• Current policyholders: Pennsylvanians who have an active NFIP policy will have a valid policy until its expiration. For renewals, or if seeking new coverage, these Pennsylvanians should contact their insurance agent about private flood insurance.
• All residents: Review your property’s flood risk and consider coverage even if you are not required by law or your lender to carry it.

Flooding is one of the most common and costly natural disasters in Pennsylvania, and Pennsylvanians don’t need to live in a federally designated special flood hazard area to be at risk:

• The Federal Emergency Management Agency reports that 20% of NFIP claims come from properties outside Special Flood Hazard Areas (SFHAs).
• A CoreLogic study identified over 515,000 Pennsylvania properties outside FEMA-designated SFHAs that still face moderate to high flood risk.

Pennsylvanians can learn more about insurance by visiting PID’s website. Consumers with any questions or concerns regarding their insurance policy, or to file a complaint, can visit pa.gov/consumer or call 866-PA-COMPLAINT (866-722-6675).