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.
On this page
- Does Homeowners Insurance Cover Flood Damage?
- How Much Does Flood Insurance Cost in my State?
- Cheapest States for Flood Insurance
- Most Expensive States for Flood Insurance
- Factors that Determine Flood Insurance Cost
- What is Risk Rating 2.0?
- How to Save Money on Flood Insurance
- What Does Flood Insurance Cover?
- Do I Need Flood Insurance?
- How to Get FEMA Flood Insurance
- How to Get Private Flood Insurance
- Higher Costs Could Result in 1 Million Fewer Americans with FEMA Flood Insurance
- Flood Insurance Costs Frequently Asked Questions
Flood Insurance Cost: Key Takeaways
- The average cost of flood insurance is $859 a year, according to FEMA.
- The cheapest state for flood insurance is Nevada ($593 per year) and the most expensive state for flood insurance is Connecticut ($1,491 per year).
- The average flood insurance cost increase under FEMA’s new pricing system (called Risk Rating 2.0) is 86%.
How Much Does Flood Insurance Cost?
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.
Does Homeowners Insurance Cover Flood Damage?
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.
How Much Does Flood Insurance Cost in my State?
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.
Average flood insurance costs by state
Cheapest States for Flood Insurance
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:
- Nevada
- Mississippi
- North Dakota
- Texas
- Utah
Most Expensive 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:
- Connecticut
- Hawaii
- Massachusetts
- Rhode Island
- New Jersey
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.
Factors That Determine Flood Insurance Cost
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 risk
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.
Building characteristics
Insurers will also factor in the physical characteristics of your building, such as:
- The materials your home is made of. For example, masonry walls perform better in floods compared to wood frame walls, which can result in lower flood insurance rates.
- Building occupancy. The type and use of your building will be factored into your rates.
- Number of floors. Buildings with more floors spread their flood risk compared to a building with one floor.
- Machinery and equipment. Elevating equipment such as hot water heaters and central air conditioning units above the first floor lowers the risk of damage to your machinery and equipment.
Type of policy
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.
Coverage types and amounts
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.
Deductible amount
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 company
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.
Other Cost Factors
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.
What Does Flood Insurance Cover?
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
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
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.
Do I Need Flood Insurance?
Some homeowners may be required to have flood insurance, including:
- If you have a federally backed mortgage and live in a Special Flood Hazard Area within a NFIP community
- If you live in a high-risk flood area and have received federal disaster assistance and want to be considered for any future federal disaster aid
- Your lender requires flood insurance
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.
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What Is Risk Rating 2.0?
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.
Current Average Cost of Flood Insurance vs. Risk-Based Cost of Insurance
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.
How to Save Money on Flood Insurance
Here are some ways you can lower your flood insurance cost.
Mitigation discounts
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.
Get an elevation certificate
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.
Choose a higher deductible
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 discount from the NFIP
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.
How to Buy FEMA Flood Insurance
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.
How to Get Private Flood Insurance
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:
- A base policy, meaning an alternative to FEMA flood insurance.
- An excess policy, which will provide supplemental coverage on top of your base FEMA policy. For example, the NFIP policy limits for building coverage is $250,000, but you might want $500,000 of coverage. An excess flood insurance policy could cover the additional $250,000.
Higher Costs Could Result in 1 Million Fewer Americans with FEMA Flood Insurance
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 Costs Frequently Asked Questions
Is flood insurance required?
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.
Is private flood insurance cheaper than NFIP insurance?
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.
What does the National Flood Insurance Program cover?
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.
How Much Does Flood Insurance Cost?
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.
