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Should I Purchase Flood Insurance?
Many homeowners don’t realize they need coverage until their home is flooded — and by then, it’s too late
Standard home insurance policies don’t shield policyholders from the most common natural disaster in the U.S.: floods.
Pete Ryan
Key takeaways
- Flooding accounts for 90 percent of all natural disasters in the U.S.
- A federal flood insurance policy for a single-family home provides up to $250,000 in building coverage and up to $100,000 of contents coverage.
- Just 1 inch of water in an average-size home can cause roughly $25,000 of damage.
Homeowners insurance is meant to protect you against costly damage caused by Mother Nature’s wrath. But standard home insurance policies don’t shield policyholders from the most common natural disaster in the U.S.
Ninety percent of all natural disasters in America involve flooding. Flood insurance can offer protection.
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Flood insurance is available to anyone who lives in an area that participates in the federal National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA). Under the program, communities are required to take measures that reduce their residents’ flood risks. Most municipalities in the U.S. have adopted these rules and are enrolled in the NFIP.
The NFIP was established in 1968 to fill a void created by the private insurance industry, which concluded that floods were too unpredictable and risky to cover. An NFIP policy for a single-family home provides up to $250,000 in building coverage and up to $100,000 of contents coverage. While the federal government administers the program, policies are sold through private insurance providers. You can find participating providers using the program’s search tool.
Federal flood insurance coverage is limited to damage to your home that’s directly caused by a flood, such as water entering your house during a hurricane, heavy rainfall or flash flooding from a lake or river. If the water comes from wind-driven rain, for example, or flooding caused by a roof leak, the damage is not covered by NFIP insurance, though it may be covered by your homeowners insurance. (Check with your insurance agent for details.)
Some private insurers sell policies that aren’t part of the NFIP, but coverage and insurance limits in the private sector can vary, and their rates are not regulated at the federal level.
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Who needs flood insurance?
To purchase federal flood insurance, your city or town must participate in the NFIP’s floodplain management program. You can go to FEMA’s website or call 877-336-2627 to find out whether your community participates.
Generally, mortgage lenders require homebuyers in high-risk areas to purchase flood insurance. Some may also require it for homes outside of high-risk flood zones.
Even if you don’t live in an area with a high flood risk, you may want to consider buying a flood insurance policy, because flooding can happen anywhere. Between 2013 and 2023, a third of NFIP claims originated from homes outside of high-risk flood zones. Repairs are often costly: Just 1 inch of water in an average-size home can cause roughly $25,000 of damage, according to FEMA. Don’t assume that federal disaster assistance will make you whole in the event of a catastrophic flood. Federal disaster assistance, which comes primarily from FEMA’s Disaster Relief Fund, is only available if the event is a presidentially declared disaster.
How to get a lower flood insurance rate
Annual premiums vary depending on the type of home, its location and other risk factors. The agency offers a tool you can use to get a quote and connect to a participating insurance provider that services your area. (You may be able to buy an NFIP policy through the agent who sold you your homeowners insurance policy.)
There are steps you can take to qualify for a lower premium. If your home is at a low risk of flooding, you could obtain an elevation certificate, which shows the elevation of the building’s lowest floor compared to the estimated height local floodwaters will reach in a major flood, and provide this evidence to your insurer.
You can contact your community’s floodplain manager, whose contact information is usually available through your city or county’s website, to find out whether an elevation certificate is available for your home. If you’re buying a home, ask the seller or builder whether they have an elevation certificate. The certificate may also appear on the property deed.
If those efforts prove unsuccessful, consider hiring a land surveyor, professional engineer or certified architect who is legally authorized to certify property elevation. The average flood elevation certificate costs $600, according to HomeAdvisor.
Here are additional ways you can reduce your home’s flood risk and snag a lower premium as a result.
- Move utilities, such as your house’s air conditioning unit or water heater, to a higher location in your home — an attic, for example — so they’re less likely to be damaged in a flood.
- Add an opening or install a vent in your ground-floor crawl space, if your home has one. This will provide space for floodwaters to flow through.
- Install a sump pump in your basement. This device automatically activates when water starts to accumulate, pumping it out to a designated drainage area. According to home services marketplace Angi, the cost of installing a sump pump ranges from $800 to $1,500, depending on the type of pump and the complexity of the project.
You may also qualify for a discount depending on how your home is built. Certain foundations, for example, are more resistant to flooding. FEMA’s website offers a flood insurance mitigation discount tool you can use to see if your property qualifies.
Don’t dawdle — or let your flood insurance lapse
If you live in a flood-prone area, don’t wait until hurricane season begins to buy a policy, because there’s usually a 30-day waiting period before the plan takes effect.
If you qualify for an NFIP policy, there’s no need to shop around — premium rates don’t vary by insurance provider.
NFIP insurance policies are good for one year. After that, you must renew the policy to maintain coverage.
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