It’s hurricane season: Here’s everything you need to know about flood insurance


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Flood insurance is a type of property insurance that covers what your homeowners and renters insurance doesn’t: damage caused by floodwaters. To protect your home and personal belongings from coastal flooding, river flooding, flash flooding or even groundwater flooding, you’ll need a flood insurance policy.

Homeowners in all 50 states can get flood insurance through the National Flood Insurance Program (NFIP), a federal government program created by the Federal Emergency Management Administration (FEMA) in 1968. If you don’t live in a community that participates in the NFIP, you may be able to find coverage on the private flood insurance market.

As of 2017, there were over five million residential NFIP flood insurance policies — constituting around 95% of all flood insurance policies on the market.

How much does flood insurance cost?

The average NFIP policy costs around $700, according to the latest data released by the FEMA. Those figures don’t include cost information about private flood insurance policy (which makes up about 5% of the flood insurance market). There isn’t much information out there about the cost of private flood insurance, but certain insurers, like Neptune, claim to offer 25% cheaper rates than the NFIP.

If your property is located in a moderate- to low-risk area, you may be eligible for a low-cost flood policy through the NFIP. Also called a Preferred Risk Policy (PRP), these policies can run as low as $200, according to FEMA.

Read more about the cost of flood insurance here.

Is flood insurance required?

Flood insurance is required if all of the following conditions apply:

  • The loan is secured by improved real estate or a mobile home that is affixed to a permanent parcel of land
  • Your home is located in a Special Flood Hazard Area (SFHA), a FEMA-designated high-risk flood zone
  • You have a federally secured mortgage through the FHA or VA, or a mortgage owned by Fannie Mae and Freddie Mac
  • The community where the property is located participates in the NFIP

Keep in mind that your lender can still require you to get flood insurance even if you only live in a moderate- to low-risk area. If you’re a renter, here’s what you need to know

Do I need flood insurance?

Flooding is one of the most pervasive and expensive natural disasters in the U.S. In fact, 98% of counties in the U.S. are impacted by a flood event, according to FEMA, and a startling 90% of all natural disasters in the U.S. involve flooding, according to the Insurance Information Institute (III). 

If you live in moderate- to low-risk areas, it’s also crucial to get flood protection. According to the NAIC, around 20% of claims and half of total flood losses in the U.S. occur outside of the 100-year floodplain, yet a miniscule 1% of properties outside of SFHAs have flood insurance.

As we touched on in the cost section, flood insurance in moderate- to low-risk areas can be as cheap as $200 a year. That’s a small price to pay for coverage that potentially prevents you from going into financial ruin.

  • Consider flood insurance if you live near the following areas:
  • A newly developed area where the flood water has nowhere to absorb
  • An area prone to wildfires where the soil is water-resistant
  • The base of a mountain where water runoff is common

Want to learn more about flood insurance? Read the rest of the guide here.

This article originally appeared on Policygenius and was syndicated by

Featured Image Credit: NOAA.