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News Release

New Jersey Department of
Banking and Insurance

Commissioner Tom Considine

For Immediate Release:
April 5, 2011

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

Commissioner Considine Reminds Consumers that Standard Homeowners Insurance Does Not Cover Flood Damage

TRENTON – New Jersey Department of Banking and Insurance (DOBI) Commissioner Tom Considine today reminded consumers that most homeowners or renter’s insurance policies do not cover flood damage. Homeowners or renters can purchase flood insurance provided by the National Flood Insurance Program (NFIP), a federal program which is the primary provider of flood insurance, through their insurance broker or carrier.

“Some homeowners believe that flood damage is covered by their standard homeowner’s policies. Unfortunately they only find out later that they are wrong once they have already suffered property damage,” said Considine. “I urge New Jersey residents, whether they live in a flood zone or not, to contact their insurance provider or agent to find out whether they need flood insurance coverage.”

Commissioner Considine stressed that policyholders do not have federal flood insurance unless they have directly purchased it – it is not automatically a part of their regular policy. Also, while commercial insurers sometimes offer flood coverage, they almost always require the homeowner to first have coverage through the NFIP. Further, consumers should be aware that federal flood insurance coverage does not go into effect until 30 days after it is purchased and they should plan accordingly. Waiting to purchase coverage until immediately before a flood situation will still leave consumers without coverage.

Commissioner Considine suggested that consumers take stock of their belongings and review and update their insurance policies long before a flood situation occurs.

Homeowners and renters should also be aware that 25 percent of flooding claims come from areas considered moderate to low-risk, according to the NFIP. That means consumers who live in areas that have not experienced flooding historically may still be at risk. Numerous factors such as land development and changing weather patterns play a large role in affecting flood risk. 

Along with flood damage, a typical homeowners or renter’s policy generally does not cover mold. Policyholders should check their current policy to see if it includes coverage for mold caused by flooding. Many insurance companies offer this coverage for a separate premium.

“Obviously, experiencing a flood and property damage can be very difficult,” said Commissioner Considine. “But it can be far worse for consumers if they don’t have the right kind of insurance and proper coverage. I urge consumers to review their coverage and make sure they have the proper protection.”

Flood insurance is only sold by licensed insurance agents. Consumers should check with the New Jersey Department of Banking and Insurance to make sure that the agent and company they are dealing with is licensed to sell flood insurance.

For more information on flood insurance go to:

For more information about what flood insurance covers and how to know if your home is in a flood area, see this consumer alert provided by the National Association of Insurance Commissioners:

For more information on flood insurance availability through the NFIP, go to:

For additional information on insurance matters go to:                                                                         

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New Jersey Department of Banking and Insurance