Preferred Risk Policy (PRP), Explained

Just one inch of floodwater can cause more than $25,000 worth of damage to your home. Read this article to learn how a Preferred Risk Policy (PRP) can keep you covered.
Written by Liliana Pina
Reviewed by Carrie Adkins
Table of Contentsdown arrow
Preferred Risk Policies are a cheaper alternative to Standard Flood Insurance Program policies, so you can be insured for flood damage to your building and its contents.
Generally speaking, home insurance policies provide a standard range of coverage options for the
named perils listed within your agreement
. Most policies do not provide
flood insurance
, however. For that, you usually need to pay for additional coverage.
Because the cost of insurance increases with each additional policy or add-on, it's common for homeowners to pick and choose which policy protections they need. Flood insurance often falls between the cracks, though floods are the most common and costly natural disaster in the United States.
Here's what you need to know about Preferred Risk Policies so you can learn how to protect your home from floods, from
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
Find insurance savings (100% Free)

What is a Preferred Risk Policy (PRP)?

Preferred Risk Policies are basically lower-cost versions of Standard Flood Insurance Policies (SFIPs). Essentially, these policies provide coverage for your home and personal property in the event of any damages caused by flooding or outside water and prevent you from having to pay any out-of-pocket money to repair or replace damaged items within your home.
PRPs are available to most homeowners and renters living in areas that have a low or moderate risk for flooding.

What does a Preferred Risk Policy cover?

Though your coverage limit will depend on a variety of factors, such as specific location and previous claims made, Preferred Risk Policies offer a maximum reimbursement of $250,000 for your home and $100,000 for the contents within it, which comes to a combined amount of $350,000 in insurance coverage.
In contrast, federal disaster assistance only provides impacted homeowners with loans that must be paid back with interest, and FEMA grants that cover damages caused by flooding typically reach about $5,000 per household.
Because the average flood claim in 2017 was more than $90,000, paired with the fact that more than 40% of all National Flood Insurance Program claims came from outside high-risk flood zones between 2015 and 2019, it's in your best interest to consider purchasing a flood insurance policy.
Preferred Risk Policies provide coverage for your home and its contents, including:
  • Air conditioning (central)
  • Basement (limited coverage)
  • Electrical systems
  • Essential equipment and appliances
  • Foundation
  • Plumbing
  • Structural integrity
  • Water heater
  • Clothing
  • Electronic appliances (TV, microwave, dishwasher, washer/dryer)
  • Furniture
  • Personal electronics
  • Portable heaters and air conditioners

How to get a Preferred Risk Policy

You must purchase a Preferred Risk Policy through the National Flood Insurance Program, which consists of more than 60 insurance companies that provide coverage for the same price. The average insurance plan starts for as low as $100 each year and can be paid annually or as monthly installments.
Though flood insurance coverage is an essential component to fully protecting any home or building, you must ensure that it is financially feasible for your situation. Be sure to check out
FEMA’s Flood Map Service Center
to see if your home is located in a flood zone and determine whether you are eligible for the program.

Preferred Risk Policy rates

Your Preferred Risk Policy rates will depend on your coverage options and amounts. For instance, you can choose to insure just your contents on the first floor, or you can choose to insure the entire building and its contents on all floors.
You can get $250,000/$100,000 building/contents coverage for an annual premium of $348. Purchasing less coverage will offer lower premiums.
Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
Judith switched to Progressive
icon savingsSaved $725 annually
Alexander switched to Travelers
icon savingsSaved $834 annually
Annie switched to Nationwide
icon savingsSaved $668 annually
Compare Car Insurance Quotes For Free
Jerry automatically shops for your insurance before every renewal. Members save $872/year.
rating primary
Rating on App Store
Start saving money!
12,000+ Reviews
Trusted by 3.5M car owners like you

You might also be interested

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings — it's 100% free