Private insurance companies and the federal government recognized that their association would improve the overall success of the program. Accordingly, insurance companies administer the program, but the federal government funds the insurance.
Flood insurance is required by law for some high risk homes but only a minority of homes fall under this category. Congress passed some laws requiring that all federally-insured or regulated lenders, for instance mortgages backed by Fannie Mae or Freddie Mac require flood insurance to protect their investment in the property.
Voluntary flood insurance policies are not enforced until 30 days after purchase.
25% of homes with flood claims each year are in low risk zones.
Collapse or subsidence of land and the insured house, along a shore of a body of water caused by waves or currents of water are considered a flood and are covered by this policy.