Questions & answers · Flood insurance
My flood insurer paid less than the repair cost. Is that because of depreciation, and can I get more after I finish the repairs?
Flood insurancePaid too littleChecked Nov 5, 2026
From K.Actuary, founded by Sangmin Kwon, ASA · sources checked 2026-11-05 · Source: FEMA · Standard Flood Insurance Policy, Dwelling Form (44 CFR Part 61, Appendix A(1)) · Art. VII.R (Loss Settlement) items 1.a and 2.d View original ↗
In short
- The standard flood policy uses replacement cost for a single-family home only if it is your principal residence and the insurance amount is high enough.
- The policy says that is 80 percent or more of full replacement cost, or the maximum amount available under the NFIP.
- The policy lets you claim on an actual cash value basis first and claim more later if you tell the insurer within 180 days after the date of loss.
What this means
This answer is about the federal National Flood Insurance Program (NFIP) standard policy. The Loss Settlement article says replacement cost settlement applies to a single-family dwelling that is your principal residence, when the insurance on the dwelling is 80 percent or more of its full replacement cost just before the loss, or is the maximum available under the NFIP. Other property and homes that do not meet this test are settled on an actual cash value basis. The policy also says that when repair or replacement costs more than $1,000, or more than 5 percent of the whole insurance amount on the dwelling, the insurer is not liable under the replacement cost clause until repair or replacement is completed. You may disregard the replacement cost conditions and claim on an actual cash value basis, and then claim more later if you tell the insurer of your intent within 180 days after the date of loss. The sources do not say how a company works out depreciation for your home.
Your next step
Ask your insurer in writing which settlement method it used and how it counted depreciation. If you want to claim more after repairs, tell the insurer of that intent in writing; the policy text gives 180 days after the date of loss.
Check it yourself
Open the policy text at the eCFR link and read Article VII, paragraph R (Loss Settlement).
Where this comes from (2)
[1] FEMA · Standard Flood Insurance Policy, Dwelling Form (44 CFR Part 61, Appendix A(1)) · Art. VII.R (Loss Settlement) items 1.a and 2.d · checked 2026-11-05
a . Replacement Cost Loss Settlement, described in R.2 below, applies to a single-family dwelling provided: ( 1 ) It is your principal residence; and ( 2 ) At the time of loss, the amount of insurance in this policy that applies to the dwelling is 80 percent or more of its full replacement cost immediately before the loss, or is the maximum amount of insurance available under the NFIP. … d . You may disregard the rep…
[2] FEMA · Standard Flood Insurance Policy, Dwelling Form (44 CFR Part 61, Appendix A(1)) · Art. VII.R (Loss Settlement) item 2.c · checked 2026-11-05
c . When the full cost of repair or replacement is more than $1,000, or more than 5 percent of the whole amount of insurance that applies to the dwelling, we will not be liable for any loss under R.2.a above or R.4.a.2 below unless and until actual repair or replacement is completed.
How we found this
We matched your question to 2 official sources, quoted the exact lines, and re-checked each quote against its source on 2026-11-05.
What we don’t know yet
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This answer quotes the official sources listed above, with the date we checked them. Your own policy, notice and state rules control. We are not your lawyer or your insurer. We don’t file, argue or negotiate claims for you — you send any letter or form yourself.
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