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Do you need flood insurance?

Learn about flood insurance with SelectQuote and find out if you need it

According to the Department of Homeland Security, floods are the most common natural disaster in the United States,1 but under most homeowner’s insurance policies, flood damage isn’t covered. With just one inch of water in a home being able to cause ten of thousands of dollars in damage, flood insurance can be a small price to pay for invaluable peace of mind. 

Why buy flood insurance?

Under standard homeowner’s insurance coverage, damage as a result of flooding is not typically covered. Regardless of whether you live in a high-risk or low-risk flood zone, no home is completely safe from potential flooding. Having flood insurance can be the difference between recovery and financial devastation.

Am I required to have flood insurance?

If you live in a high-risk flood area and you have a mortgage, you’re most likely required to also have flood insurance. You may not be required to have flood insurance if your property falls in a moderate-to-low risk area, however, a lender can require it even if they are not legally mandated to do so. 

Even if you’re not required to have it, flood insurance outside of flood-prone areas can be surprisingly affordable. It’s a common misconception that low-risk flood zones are “no risk” flood zones, but flooding can happen anywhere at any time—scenarios like melting snow, poor drainage systems, broken water mains can all result in potential flooding. 

What does flood insurance cover?

Purchasing flooding insurance will help cover the costs of repairs or replacing belongings, such as clothing, furniture, electronics and more. 

Types of Flood Insurance

National Flood Insurance Program (NFIP)

The National Flood Insurance Program provides coverage through the Federal Emergency Management Agency for the structure of the home and for personal possessions. As long as your community participates in the program, you should be eligible for NFIP coverage.  

NFIP coverage comes in two forms: building property coverage and personal property coverage. Building property coverage provides the replacement costs for the structure of your home and personal property coverage provides the actual cash value coverage for your personal belongings. 

National Flood Insurance Program (NFIP) Rate Updates

Beginning in October of 2021, FEMA updated their methodology in an attempt to provide more equitable insurance rates based on information regarding risk. These new premiums are meant to better reflect flood risk for individual properties. New policies sold will use this new methodology. Existing policyholders may be eligible for immediate insurance rate decreases upon policy renewal.

FEMA estimates that nearly 23% of policyholders2 will see decreases in premium costs at their next renewal. In addition, these changes are meant to be more transparent; in the past, flood insurance policyholders would see annual rate increases without seeing their full risk rate. Rate increases will be capped at 18%2 per year for those policyholders whose risk is set to increase.

Private Flood Insurance

Flood insurance sold through private insurers is a viable alternative to relying on NFIP coverage. Although this option may not be available in every state, flooding policies sold through private insurers are similar to NFIP policies but can often offer higher levels of coverage.

SelectQuote can help you make informed decisions about flood insurance for your home.

As you learn more about your options for flood insurance, it may also be a good time to consider your overall homeowners insurance needs. At SelectQuote, we’re here to make shopping for coverage easy. In addition, we can help you navigate the flood insurance space. We can walk you through the decision to purchase flood insurance, including whether private insurance or NFIP coverage makes sense based on recently updated risk ratings. We can help you find a flood insurance company in your area that partners with FEMA to offer NFIP coverage.

In just minutes, we can compare rates and coverage from some of the most trusted carriers and we’ll take the time to learn more about what you hope to protect, figure out where there are gaps in your insurance and find the coverage you need at a price that fits your budget.

1 https://www.ready.gov/floods
2 https://www.fema.gov/press-release/20210924/fema-offers-more-equitable-flood-insurance-rates-beginning-oct-1

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