Is there a minimum coverage requirement for a flood insurance policy?

No, there is no minimum coverage requirement if coverage is being purchased voluntarily.

However, if coverage is being purchased as the result of a lender requirement (mandatory purchase requirement), the amount of flood insurance required must be at least equal to the lesser of (1) the outstanding principal balance of the loan, (2) the maximum amount available under the NFIP, or (3) the total insurable value of the property.

Some lenders reserve the right in their loan documents to require the purchase of flood insurance above the amount required by law. If so, they may require the amount of coverage to be as high as the building’s replacement cost value. Property owners should consult with their insurance agent and lender to determine the appropriate amount of insurance to purchase. To contact us, please call 973.627.5500. This does not apply to the Group Flood Insurance Policy (GFIP).