August 26, 2019

Average Cost of Flood Insurance

Read more about Home Insurance

Flood insurance can cost significantly more in high-risk areas. Keep reading to learn whether you need it, and what it will cost you.

The average flood insurance policy costs $935.00/year. After HFIAA adds their surcharges, the average premium increases to $1,062.00/year.

The average flood claim is around $43,000. The average payout on flood insurance over the last year was $33,356.

Does homeowner's insurance cover flood damage?
Standard homeowner's insurance policies DO NOT cover damages from a flood. A flood is defined as outside water that seeps in from outside of your home. You must have a separate flood policy to cover damages caused from these perils.

Factors Affecting Flood Insurance Rates

Prices for flood insurance are regulated by FEMA, a federal program. Rates will be the same no matter which insurance company you choose. However, costs will differ depending on:

  • The flood zone you are in
  • Elevation level of your home
  • Age of your home
  • Building occupancy
  • Number of floors
  • Chosen deductible

If your home is in a low–moderate risk area, your average premium may be around $475.00/year with a basement and $425.00 without.

Flood insurance premiums may change annually, but that is not common. Rates changes depending on the number of disasters and the number of claims paid by FEMA throughout the year.

Rates in 2019 are expected to increase by a maximum of 18% due to the large number of disasters that hit the nation the previous year.

How to Lower Your Premium
FEMA and private flood insurance companies offer several options to choose from. The simplest way to lower your premium is to choose a higher deductible.

FEMA offers deductibles of $1,000, $2,000, $3,000, $4,000, $5,000, and $10,000 for structures. Choose the deductible that you can comfortably afford.

What Flood Insurance Covers

While FEMA sponsors the flood insurance, it is purchased through an insurance agent participating in the National Flood Insurance Program.

Coverage Includes:

  • Storm surge
  • Damage to your dwelling
  • Foundation damage
  • Electrical and plumbing repairs
  • HVAC
  • Detached garage
  • Personal belongings above ground level
  • Heavy machinery in a basement (e.g., washer/dryer, boiler)

Coverage Excludes:

  • Personal belongings stored below ground level
  • Outdoor furniture
  • Cash, stocks, or bonds
  • Precious metals
  • Swimming pools
  • Detached structures other than a garage

The NFIP coverage limit is $250,000 for structural damage and $100,000 for personal belongings.

FEMA Assistance
Filing a flood insurance claim is done through your insurance company. If there is a nationally declared disaster and you do not have flood insurance, have unpaid claims, or damage beyond what your insurance covers, FEMA may offer grants and financial assistance to the best of their ability.

While your personal car insurance provides coverage for flooding, FEMA can help with the cost of flooded cars if your insurance does not provide enough coverage.

FEMA Flood Zones

All homes are placed in a designated flood zone that determines the risk of a flood occurring. Flood zones typically measure the distance of the home from large bodies of water.

Preferred Flood Zones
Flood zones B, C, and X are farthest from large bodies of water and are within the 500-year flood plain. They typically have a 0.2% chance of flooding.

While it isn't federally required to have flood insurance in these zones, your mortgage company may require it. The coverage can also give you financial security should the unforeseen occur.

If you decide to purchase flood insurance in a Preferred Flood Zone, you do not need to insure for the entire cost of rebuilding your home. Dwelling coverage of approximately $50,000 is usually sufficient.

Premiums are lower in these flood zones. You can select a higher deductible to reduce costs even further.

High Risk Flood Zones
Flood zones within a 100-year flood plain are close to large bodies of water and have a 1% chance of flooding.

These include zones A, AE, A1-30, AH, AO, V, VE, and V1-30. If your home is within a high-risk zone, you will likely be required to purchase flood insurance.

Coverage that is equal to the cost to rebuild your home or the NFIP maximum coverage of $250,000 for the structure and $100,000 for personal belongings is recommended.

A 2,500-square-foot home with just 1" of water depth can cost as much as $26,000 in damages. That makes the average $1,062 premium seem much more affordable.

Bottom Line

Flood insurance is required if you live in a high-risk flood zone. The government regulates the rates on FEMA-issued insurance. It is important to know your flood zone and the risks involved to ensure that you have the proper coverage.


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