As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Written By Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Lead Editor, Insurance Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: Nov 30, 2023, 12:21pm
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Flood insurance costs an average of $72 a month from the National Flood Insurance Program (NFIP), according to Forbes Advisor’s analysis. Policies from the NFIP are also known as FEMA flood insurance policies.
Floods are the most common natural disaster in the U.S. Despite flooding risks, the National Association of Insurance Commissioners estimates that between 85% and 95% of homeowners don’t have flood insurance.
Flood Insurance Cost: Key Takeaways
Flood insurance costs an average of $859 a year from the NFIP. An NFIP policy provides up to $250,000 of dwelling coverage and $100,000 for contents coverage.
Standard homeowners insurance does not cover flood damage that’s caused from water coming from outside the home’s foundation.
A standard homeowners policy includes insurance for water damage if it’s caused by something like a sudden burst pipe, accidental leaks, ice dams and water from a roof leak.
To get flood coverage, you need a separate flood insurance policy. Most homeowners with flood insurance buy it from the National Flood Insurance Program, but you may be able to purchase a policy in the private market.
A flood insurance policy typically covers you for flooding related to torrential rains, storm surges, inland flooding, flash floods and other times when water may flood from outside your home.
Flood insurance costs vary based on multiple factors, including where you live, the cost to replace your home and how much coverage you buy.
Here are the average annual flood insurance costs by state for a policy from the National Flood Insurance Program, according to a Forbes Advisor analysis of flood insurance rates.
The cheapest state for flood insurance is Nevada with an average cost of $593 per year. Here are the five cheapest states for flood insurance:
The most expensive state for flood insurance is Connecticut with an average cost of $1,491 a year. Here are the five most expensive states for flood insurance:
That doesn’t mean you will always pay more if you live in those states. Your property’s flood risk is a major cost factor. Homes in high-risk areas cost more for flood insurance.
Common factors that determine flood insurance costs include a property’s flood risk, building characteristics, type of policy and deductible amount. Here’s a full list of what factors influence flood insurance costs.
Flood insurance costs are largely based on your property’s flood risk. Homes that have a higher flood risk will pay more for homes with a low flood risk.
For example, FEMA’s Risk Rating 2.0 takes into account the elevation of your home, the foundation type, first floor height and the distance to water.
Insurers will also factor in the physical characteristics of your building, such as:
Your flood insurance policy coverage type influences rates. For example, you can buy a building-only policy, contents-only policy or both from the NFIP. You’ll pay more for flood insurance if you buy both building and contents coverage compared to a building-only policy.
How much coverage you buy influences costs. For instance, a private flood insurance policy that offers building coverage of $1 million will cost you more than a NFIP policy with $250,000 in building coverage.
Similar to other types of insurance policies, a flood insurance policy will have lower costs if you have a higher deductible. An insurance deductible is subtracted from an insurance company claims payout, so if your house has $50,000 worth of flood damage and you have a $2,000 deductible, the insurer will pay you $48,000 for the damage.
Insurance companies don’t charge the same for coverage. You may find one flood insurer charges much higher rates for the same coverage than another insurance company. That’s why it’s vital to shop around and get flood insurance quotes from multiple insurers when looking for a private flood insurance policy.
Where your home is located and how it relates to the community rating system discount or whether your house is on a barrier island can affect your NFIP flood insurance costs.
Flood insurance offers dwelling and contents coverage. Dwelling insurance compensates you for damage to your home, while contents coverage reimburses you for damaged belongings within the home. You can buy a building-only policy, a contents-only policy or both.
Flood insurance offers dwelling and contents coverage. Dwelling insurance protects your home, while contents coverage handles the belongings within the home.
You can buy a building-only policy, a contents-only policy or both. Flood insurance through the NFIP caps dwelling coverage at $250,000 and contents coverage at $100,000. The private market may offer more generous coverage limits, though.
Flood insurance policies generally have a 30-day waiting period for coverage. That means coverage doesn’t kick in until 30 days after the policy is purchased, which prevents a homeowner from buying a flood insurance policy when a hurricane or other major storm is already on the way.
Unlike homeowners insurance, an NFIP flood insurance policy doesn’t have additional living expenses coverage, also called loss of use. Additional living expenses coverage in a home insurance policy provides money for extra expenses if you must live elsewhere temporarily after a home insurance claim. Homeowners can get reimbursement for hotel bills, restaurant meals, clothing and laundry service, pet boarding and storage. This type of coverage isn’t part of flood insurance.
Dwelling coverage pays to repair or rebuild your house if it’s damaged by a flood. For example, if a flood destroys your electrical systems and water heater, your dwelling coverage would pay to repair or replace it. Dwelling coverage is also called building coverage.
Flood insurance through the NFIP caps dwelling coverage at $250,000. You may be able to find higher coverage limits through the private flood insurance market.
Contents coverage pays to repair or replace your personal belongings if they’re damaged by a flood. This includes items such as appliances, clothing and furniture. Contents coverage is also called personal property coverage.
Flood insurance through the NFIP caps coverage at $100,000. You may be able to find more generous limits through the private flood insurance market.
Some homeowners may be required to have flood insurance, including:
Even if you are not required to have flood insurance, it’s worth considering. That’s because standard homeowners insurance won’t cover flood-related damage.
FEMA introduced Risk Rating 2.0 to address inaccurate flood rates and the NFIP’s large debts. This new methodology no longer uses flood maps. Instead, rates are based on an individual property’s risk, such as the foundation type, elevation of the home and the distance to water. Risk Rating 2.0 is intended to produce the most accurate flood insurance costs, according to FEMA.
FEMA made the change to the pricing methodology, which had been used by the NFIP since it was introduced in 1968. This methodology relied on “Flood Insurance Rate Maps” (FIRMs) to determine flood insurance costs. The problem with this model was that too many properties were inaccurately rated and the premiums were insufficient to cover flood claims, which led to massive debt for the NFIP.
Here’s a look at FEMA’s data showing how much flood insurance costs could go up in each state under Risk Rating 2.0. This table shows the average cost of flood insurance in each state as of September 30, 2022, and what policyholders would pay based on FEMA’s new pricing system.
Here are some ways you can lower your flood insurance cost.
FEMA offers discounts to homeowners who take actions such as installing flood openings and elevating your machinery and equipment (such as a central air conditioner and hot water heater) above the first floor.
If your home has an elevation certificate that shows your first floor is higher than the first floor height determined by FEMA, you could get a lower premium.
FEMA flood insurance policies have separate deductibles for buildings and contents coverage, ranging between $1,000 and $10,000. If you select higher deductible amounts, you’ll pay less in premiums. You can save up to 40% if you select a $10,000 deductible, but keep in mind, you’ll have to pay that amount if you file a flood insurance claim.
Community Rating System (CRS) discounts are based on your community’s efforts to reduce flood risk. Ask your insurance agent if your community participates in the CRS.
To get an NFIP policy, contact your home insurance agent. You can also find an insurance company that sells FEMA flood insurance on FEMA’s website.
The NFIP is managed by FEMA and sells federally backed flood insurance through more than 47 insurance companies through an initiative called NFIP Direct. NFIP policies are available in more than 22,000 communities that participate in the program. The program is the primary provider of residential flood insurance in the U.S. It covers more than 5 million homes and businesses.
There is typically a 30-day waiting period to buy flood insurance before it is effective, so it’s a good idea to buy a policy as soon as possible.
FEMA flood insurance is not the only option. You can also buy flood insurance from a private insurer. It’s a good option for homeowners who don’t live in an NFIP participating community or homeowners who find FEMA coverage options to be insufficient.
Private flood insurance may be available as:
Due to higher costs for some homeowners, one million fewer Americans will buy FEMA flood insurance by the end of the decade, according to a report obtained by the Associated Press under the Freedom of Information Act. The report was originally provided to the U.S. Treasury Secretary and some congressional leaders at the end of 2021.
FEMA has downplayed the report and stated that the numbers were taken out of context, noting that the agency has not directly studied how many homeowners will buy flood insurance.
“There’s numerous reasons that growth could occur as time goes on,” said David Maurstad, a senior executive of the NFIP. Maurstad added that an enrollment analysis should factor in FEMA’s marketing efforts, clear messaging of flood risk, price decreases and other factors.
Flood insurance is required under certain circumstances. If you have a government-backed mortgage and live in a high-risk flood zone, you are required to have flood insurance. If you live in a high-risk area and have received federal disaster assistance, such as a low-interest disaster loan from the U.S. Small Business Administration or grants from FEMA, you are required to have flood insurance if you want to be considered for future federal disaster aid. Even if you are not required to have flood insurance, it’s worth considering. That’s because a standard homeowners insurance policy won’t cover flood-related claims.
You may be able to find private flood insurance that’s cheaper than NFIP insurance. Private flood insurance companies don’t have the same rates, so it’s wise to shop around and get quotes from multiple insurance companies when looking for a flood policy. The average cost of NFIP insurance in the U.S. is $859 per year, according to a Forbes Advisor analysis of flood insurance rates.
NFIP flood insurance can be broken down into two types of coverage: Building coverage pays to repair or replace your physical building, such as foundation walls, electrical systems, plumbing systems, permanently installed carpeting, built-in appliances and detached garages. You can purchase up to $250,000 of coverage. Contents coverage pays to repair or replace your personal belongings such as your clothes, furniture, carpets not covered by building coverage, washer and dryer, and valuable items (like artwork). You can purchase up to $100,000 of coverage. Both coverage types cover elevated floors and areas below the lowest elevated floors (like basements and crawlspaces). But coverage is limited in areas below the elevated floors, such as carpeting, drywall for walls and ceilings, and personal property. You can purchase a building-only policy, contents-only policy or both.
Flood insurance costs an average of $859 per year for a National Flood Insurance Program policy. An NFIP policy provides up to $250,000 of dwelling coverage and $100,000 for contents coverage. Most homeowners with flood insurance have an NFIP policy, but you may also be able to get more coverage through a private insurer. You can also buy additional coverage if you go through a private flood insurance company.
