Do you have protection for a 99% problem? Although only 3% of homeowners see flooding as a risk to their homes, 99% of US counties have experienced flooding in the last 25 years, according to FEMA. Scientists expect the frequency and intensity of flooding to increase as climate change continues to create more intense precipitation and sea level rise is accelerating.
About $1000 per year protects from a $50,000 disaster
As a homeowner, you’re likely aware that standard homeowners’ insurance policies won’t cover flood damage to your home and belongings from storm surges, river and stream overflows, and flash floods. And while only 15% of property owners carry flood insurance, the average National Flood Insurance Program (NFIP) flood claim payout to those who do is over $50,000, according to FEMA’s latest 2019 figures.
Flood insurance is available through NFIP and private market carriers. Average annual flood insurance costs depend on several factors, from your home’s structure and elevation to frequency of flooding and distance to water. Overall costs range by state from $629 to $1410.
Federal Aid Challenges
Some homeowners believe that federal disaster aid will cover them in the event of an unexpected flood. However, what they don’t realize is:
• Disaster aid isn’t offered after every flood
• Disaster aid often takes months
• Uninsured flood victims then get a disaster loan from the SBA
Meanwhile, the damage is done, and funding for repairs doesn’t come quickly, if at all. Yet, those who choose to carry flood insurance can get claims quickly processed and begin to recover from the damage to their home and belongings.
5 Ways to Reduce Flood Insurance Costs
Even though the average premium is worth the protection, homeowners have a few options for reducing policy costs. Consider:
1. Choosing a higher deductible
2. Taking steps to mitigate flood risks, like elevating HVAC units above the first floor
3. Getting an elevation certificate
4. Qualifying for the NRIP Community Rating System discount
5. Comparing NFIP rates to the private market
Discover more about NFIP’s specific building and belongings flood coverage, replacement cost vs. ACV, FEMA’s Risk Ratings 2.0, private flood insurance options, and more in this Forbes Advisor article.