Preferred Risk Policy

A preferred risk flood insurance policy is designed for homeowners, business owners, and renters with property in a low-to-moderate flood hazard areas who want flood insurance coverage. Preferred risk policies are cost-effective alternatives to standard residential, commercial, and renters flood insurance. Preferred risk policies were extended to homeowners, business owners, and renters as a result of changes by FEMA to its internal classification of flood areas. Potential purchasers in these covered areas are eligible for the lower premiums offered by a preferred risk policy provided that the property’s prior number, and amount, of claims from flooding do not exceed a certain threshold.

Preferred risk policies offer two types of coverage: building and contents coverage; and contents coverage only.

For homeowners, a preferred risk policy covers up to $250,000 for the structure and up to $100,000 for contents, or personal property, in the structure. For a business, the limits are $500,000 for the structure and $500,000 for contents.

A preferred risk policy offers homeowners and businesses owners an affordable alternative to a standard flood insurance policy, often with the same, or even higher, coverage limits.