Flood Insurance: Following Hurricane Helene’s flooding, many homeowners are considering buying flood insurance. Most homes and commercial buildings do not need flood insurance, but those with mortgages from government-backed lenders and properties in high-risk flood zones are required to have it. A 2023 survey by Triple-I and Munich Re found that 64% of homeowners felt their homes were safe from flooding.
It’s not surprising that many opt not to purchase this extra coverage, as about 85% of homeowners do not have flood insurance, according to Simply Insurance. However, the Munich Re report emphasizes that “nearly everyone can be at risk because anywhere it can rain, it can flood.”
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FEMA data shows that 99% of American counties experienced flooding between 1996 and 2019. Yet, only 78% of homeowners who believed their homes could flood had insurance. Not having flood coverage can lead to costly repairs; FEMA states that “damage from floodwaters can reach up to $25,000 with just one inch.”
What is the cost of flood insurance?
Dude there’s literally a person in his house on his kayak filming the Hurricane flood his home and he’s so chill about it “like ah yeah I don’t have insurance, I’m from Florida why would I leave?” THIS IS WILD pic.twitter.com/lB0nT9Av35
— ✨️Pixie Dae✨️ VTuber (@tinypixiedae) September 27, 2024
The money that is paid out is far more than the cost of purchasing flood insurance. Despite the fact that costs vary based on a number of factors, including the likelihood that your home will flood, its age and size, its elevation, the type of policy you select, and the extent of coverage, NerdWallet’s analysis of 2024 National Flood Insurance Program, or NFIP, rates shows that the average premium in the US is $819 annually. This equals roughly $68 per month.
Policyholders receive an average claim payment of $68,000 from the NFIP, which is never repaid.
How does an insurance policy for floods work?
Businesses, renters, and homeowners can all get flood insurance through their insurance company or agent. Over 50 insurance companies are part of the National Flood Insurance Program (NFIP), which is run by FEMA and makes sure that no one is turned away because of their flood risk. There are two main types of coverage: coverage for buildings and coverage for things inside buildings.
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Building coverage protects your home’s permanent parts, some appliances, and the building itself. But contents coverage protects the things that are inside the building that are personal to you.
But it doesn’t cover all kinds of flooding. For instance, sewer backups are not counted unless they happen because of flooding. A flood is “an excess of water on land that is normally dry, affecting two or more acres or two or more properties.” Visit the official Flood Smart website to find out more.
Also, keep in mind that flood insurance usually doesn’t start until 30 days have passed. There are two exceptions: if you need coverage to get a loan for a house from a federally backed lender, or if the community flood map changes.
