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Business Property & Flood Insurance

As a business owner, you know that protecting your building and your contents is vital to its survival. Your business is either in a high-risk or moderate-to-low risk area and insurance premiums vary accordingly.

Moderate-to-Low Risk

Most commercial buildings in a moderate-to-low risk area qualify for coverage at a preferred rate. Preferred Risk Policy premiums are the lowest premiums available through the NFIP, offering building and contents coverage for one low price. You can also opt for Contents Only coverage, if you prefer. Premiums start as low as $550 per year for both Building and Contents, while Contents Only coverage starts at $145 per year. Commercial coverage gives you up to $500,000 of insurance to protect your building and up to $500,000 to protect its contents.

If you don't qualify for a Preferred Risk Policy, a standard rated policy is still available. Even though flood insurance isn't federally required, nearly 25% of all NFIP flood claims occur in moderate-to-low risk areas.


If you live in a high-risk area, a standard rated policy is the only option for you. It offers separate building and contents coverage.

Flood insurance premiums are calculated based on factors such as: 

  • Year of building construction 
  • Building occupancy 
  • Number of floors 
  • The location of its contents 
  • Its flood risk (i.e. its flood zone) 
  • The location of the lowest floor in relation to the elevation requirement on the flood map (in newer buildings only) 
  • The deductible you choose and the amount of building and contents coverage 

If your commercial property is in a high-risk flood area and you have a mortgage from a federally regulated or insured lender, you are required to purchase a flood insurance policy. 

What's Covered

Flood insurance policies cover physical damage to your property and possessions. You can use the following list as a general guide to what is and isn't covered.

Building Property

  • The insured building and its foundation 
  • Electrical and plumbing systems 
  • Central air conditioning equipment, furnaces, and water heaters 
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers 
  • Permanently installed carpeting over unfinished flooring 
  • Permanently installed paneling, wallboard, bookcases, and cabinets 
  • Window blinds 
  • Detached garages (up to 10% of Building Property coverage) and detached buildings (other than garages) require a separate Building Property policy 
  • Debris removal

Personal Contents Property

  • Personal belongings, such as clothing, furniture, and electronic equipment 
  • Curtains 
  • Portable and window air conditioners 
  • Portable microwave ovens and portable dishwashers 
  • Carpets that are not included in building coverage 
  • Clothing washers and dryers 
  • Food freezers and the food in them 
  • Certain valuable items such as original artwork and furs (up to $2,500)

What's Not Covered

  • Damage caused by moisture, mildew, or mold that could have been avoided by the property owner 
  • Currency, precious metals, and valuable papers such as stock certificates 
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools 
  • Living expenses such as temporary housing 
  • Financial losses caused by business interruption or loss of use of insured property 
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy) 

Flood Insurance for Basements and Areas Below the Lowest Elevated Floor

Coverage is limited in basements regardless of zone or date of construction. It's also limited in areas below the lowest elevated floor, depending on the flood zone and date of construction. These areas include:

  • Basements 
  • Crawlspaces under an elevated building 
  • Enclosed areas beneath buildings elevated on full-story foundation walls that are sometimes referred to as "walkout basements" 
  • Enclosed areas under other types of elevated buildings
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