The Federal Emergency Management Agency (FEMA) has confirmed that National Flood Insurance Program (NFIP) policies will cover property damage caused by oil in flood waters. This is good news for consumers who have purchased flood insurance for hurricane season, according to the Insurance Information Institute (I.I.I.).

FEMA’s clarification comes after rising concerns over whether flood insurance policies would cover damage to homes and businesses if oil from the Deepwater Horizon spill mixes with flood waters, comes ashore during a storm and causes pollution damage to NFIP-covered buildings and their contents.