Private flood insurance against the federal policy: what you gain and what you give up
Enter your federal bill, its full-risk price and a private quote: five years of each, side by side.
Federal policy cheaper over five years by
$1,144
Federal: $6,483 on the 18 % path. Private: $7,627 with the increase assumed.
| Federal, renewal 5 | $1,305 |
| Private, renewal 5 | $1,769 |
Compare the same building and contents limits and deductibles; a private policy can be cancelled or not renewed.
Compiled by Radif Partners · Where the numbers come from · FEMA and OpenFEMA files, rules read in 42 U.S.C. and 44 CFR · not a quote
Private flood insurance is a policy sold by an insurer on its own terms instead of the federal Standard Flood Insurance Policy. Since July 1, 2019, a lender must accept a private policy that meets the legal definition: coverage at least as broad as the federal policy, 45 days' written notice before cancellation or non-renewal, and a mortgage clause. The private share of the flood market grew from 7 % in 2018 to 14 % in 2025, according to the GAO. A private policy can cover a house above the federal $250,000 building limit and sometimes prices a low-risk house below the federal premium. It also gives up two protections: no 18 % yearly cap applies to its renewals, and an insurer can decline to renew. Leaving the federal program has a cost a quote does not show: the capped discount is lost, and going back means a new policy at the full-risk price. On the national median, the federal bill would reach $1,305 in year five.
What the law asks of a private flood policy
A private policy is not automatically good enough for a lender. The definition in 42 U.S.C. 4012a(b)(7) requires an insurer licensed or approved in the state, coverage "at least as broad as" the federal Standard Flood Insurance Policy, including deductibles, exclusions and conditions, at least 45 days of written notice before cancellation or non-renewal, information about the federal program, a mortgage interest clause and a right to sue within one year of a written denial. The banking regulators' joint rule, in force since July 1, 2019, turned that definition into an obligation: a regulated lender must accept a policy that meets it (FDIC FIL-8-2019). A policy can carry a sentence saying it meets the definition, which spares the lender a clause-by-clause review.
Lenders may also accept, at their discretion, private policies or mutual aid plans that do not meet the definition, under conditions set by the same rule. That door is the lender's choice, not yours.
Where a private policy can do more
The federal limits are fixed by statute: $250,000 for the building and $100,000 for contents of a one-to-four family home (42 U.S.C. 4013(b)). A house that would cost more to rebuild is underinsured with the federal policy alone. In FEMA's 2023 tables the median rebuild value of insured single-family homes was $425,266, and 76 % of policies in force on July 31, 2026 already carried the maximum building coverage. Private insurers sell either a full replacement of the federal policy or an excess policy that starts where the federal limit stops.
Private policies can also cover items the federal policy treats narrowly, such as additional living expenses while the house is repaired, or a basement's finishings, depending on the contract. Each policy is different: what it covers is in its own wording, not in a general rule.
How much of a large loss the federal limits leave uncovered
The federal policy would pay
$350,000
| Building, up to $250,000 | $250,000 |
| Belongings, up to $100,000 | $100,000 |
| Above the legal limits | $216,000 |
| Deductibles | $4,000 |
What a private policy gives up
The yearly cap. A federal policy below its full-risk price climbs at most 18 % a year on its premium (42 U.S.C. 4015(e)). A private insurer re-prices at each renewal on its own model. A low first-year quote says nothing about the second year.
Continuous coverage. The discounts the federal program grants by law are kept only by policyholders who stay insured with it. FEMA's own legislative proposal acknowledges that someone who moves to a private policy "may not be eligible to regain their premium discounts", and the GAO wrote in October 2026 that no law had changed this as of August 2026 (GAO-27-108012). For a house whose federal bill is still well below its full-risk price, that discount is the most valuable part of the policy.
Renewal. The federal program renews any policy whose premium is paid, as long as Congress keeps the program authorized (currently through December 11, 2026). A private insurer can decline to renew after giving notice, often after a large loss in the area.
Comparing five years, not one
The calculator above adds up five years of each option. Take the national median: a federal bill of $1,081 whose full-risk bill is $1,305. A private quote of $1,109, about 15 % under the federal full-risk bill, that rises 8 % a year would cost $6,506 over five years, against $6,483 on the federal path. The result card reads: federal policy cheaper over five years by $23. Change the private increase you assume and the answer can flip; that assumption is yours, since no public file publishes private renewals.
Two checks make the comparison fair: the same building and contents limits on both sides, and the same deductibles. A private quote with a $10,000 deductible is not comparable with a federal policy at $2,000.
Where to read the numbers
Your federal declarations page shows the Full-Risk Premium and the discounted premium you pay. The rate increase page explains how far the cap still has to run, and the coverage limits page what the federal policy pays on a large loss. For a private quote, a licensed agent or an insurer can price the same house; this site sells neither and receives nothing from either.