Flood Insurance

Flood insurance is important for many people these days. Floods are the #1 natural disaster in the United States today.  From 2003 to 2012 the total flood insurance claims averaged more than $3.0 billion per year. Flood insurance is more important than ever with the rising cost of home repairs. An insurance claim can help a family or homeowner rebuild their lives after a flood damages their residence. It can even protect a renter’s belongings. It is necessary for every home in the country to have flood insurance no matter the risk of flood because flooding can occur anywhere it rains.

Cost of Flood Insurance

Flood Insurance

Location is only part of the risk of flood. There are many other factors that play into flood insurance and premiums. Many people think that floods only happen in coastal areas but there are different risks for any location. A flood can result from fast melting snow, severe storms, heavy rainfall, tropical storms, hurricanes, a flood after fire, flash floods, or mudflows. Flood coverage can be great for any family because of the great protection it offers the policyholder.

Many people wonder what determines the cost of the premium payments. Flood risk is based on more than just the history of the area. Location is a factor and flood history definitely plays a role in flood insurance premiums but the premium is also based on rainfall, river-flow, tidal-surge data, topography, and the flood control measures in the area. It is also important to look at how the building has changed over the years and the development of the flood prevention methods. The lower the degree of flood risk for the property, the lower the flood insurance premiums will be. Certain coverage plans can be as low as $129 per year. This is usually paid in one bulk payment.

Cost of flood insurance can be the biggest deterrent in purchasing the policy. It might seem unnecessary for many homeowners or renters because they believe that something like a flood only happens in the bible. But 1 in 4 flood claims is for a home that isn’t in a flood plain or in an area that is obviously at risk for a flood. The damage that is covered under flood insurance could have been caused by something other than a flood. Damage could occur from a clogged drainage system, rapid accumulation of rainfall, or overtopped levees.

Flood Insurance Coverage

Flood Insurance CoverageMost flood insurance policies cover personal items as well as home appliances and the building itself. All your personal property, regardless if you are a renter or homeowner, will be protected by your flood insurance policy. If damage occurs to your property because of a flooded basement for example, the insurance policy will cover the costs of replacement. Personal belongings could include clothing, furniture, electronics, and even things like curtains or paintings. Certain valuable items up to $2,500 will be covered, like an original piece of artwork. Your flood insurance is something that takes care of the financial hardship of a mishap like a flood. The emotional burden of damage to your home is hard enough without worrying about how you will finance the replacement of all yoru belongings. That is the beauty and the value of flood insurance. For a relatively low cost you can ensure that you are protected and supported through the stressful experience of a flood or flood-like damage to your residence.

Flood insurance also protects things like air conditioners or window units. It covers freezers, refrigerators, and even the food inside the fridge. Washers and dryers are covered as well under most flood insurance programs, which can be a blessing for most renters and homeowners. That is sometimes the most expensive possession in a home and if it is damaged the cost of replacement can be overwhelming and even unattainable. Carpets that are not included in the building coverage of a flood insurance policy will be covered under personal contents property clauses. Even portable microwave ovens and dishwashers are covered. Flood insurance helps the policyholder deal with the cost of replacement of the smaller things that get damaged and need to be replaced.

The larger issue of damage to the actual house and building is covered as well under the building property protection clause. It insures the building and foundation. It also covers the electrical and plumbing systems of the residence. The water damage could be extensive and completely destroy the foundation. The central air conditioning, furnaces and water heaters could all be compromised by flood damage. With flood insurance the cost of replacement could be manageable or even completely covered. Building property coverage covers cooking stoves, and other built-in appliances as well as permanently installed carpeting, wallboard, bookcases, or cabinets. It also covers larger things like detached garages and even the eventual debris removal that always accompanies a flood. The damage from a flood or extensive water collection can be incredibly damaging and widespread. With flood insurance, every item or piece of property that is damaged could be covered.

Home Flood Damage Insurance

There are many different effects that flood damage could have on a property. The damage could be extensive and could stay hidden for a long time. Flood insurance covers structural damages that could be deep within the building. Many different policies will still protect the building long after a flood. There is a 30 day waiting period on flood insurance to take effect so it is important to get flood insurance immediately. A flood or a situation like it can happen anytime. A flood-like environment could occur after a particularly intense rainstorm, a broken levee, or even snowmelt. Floods occur in certain places annually or even every five years. The residents in those areas understand that flood insurance is important and have had it for years. It is even more important for homeowners or renters in areas that don’t typically see floods to get flood insurance. Floods or extensive after damage can happen in a blink of an eye and it is important to be protected in case it does happen. Residents who aren’t used to it have no idea how to continue or proceed because they aren’t used to dealing with floods. Their insurance agents and policy can help guide them through the process of rebuilding.

Flood Risk

There are certain flood insurance policies that are called preferred risk policies. These are for homes in moderate-to-low risk areas for flood damage. These areas submit at least 20% of flood claims and receive up to one third of disaster assistance for flood damage. Residents in areas like this struggle the most with getting flood insurance because they think that it is mostly an unnecessary expense. It is really important to have flood insurance, even though in moderately risky areas it is not federally mandated to have flood insurance, it is a very important part of protecting your home. In the past four years the average residential flood claim is more than $30,000. That is a huge cost that could be out of pocket for the homeowners or renters who decide not to invest in flood insurance.

If a potential policyholder isn’t sure about getting flood insurance they can use an interactive tool to explore the cost of a flood to their residence. They can look at the cost inch by inch and see what the damage could amount to. The cost can also have a lot to do with the year that the building was constructed. The number of people living in the building as well as the number of floors also contributes to the overall cost of the premium. Insurance agents look at the location of the contents of the home and the flood zone risk of the property when helping their clients determine the potential cost of a flood insurance policy. One of the primary factors in cost of flood insurance is the deductible you choose and the amount of building and contents coverage that you choose to purchase. Residential premium coverage starts at as low as $55 per year. The most common flood insurance policy is both residential building and personal property coverage.

In high risk areas in the United States it is federally required to have flood insurance. In this instance homeowners are generally happy to comply and find good flood insurance because of the risk. If a flood does happen it is more important to have the coverage than to deal with the consequences alone. Those located in high risk areas worry about the premium costs rather than the decision to purchase flood insurance. They need to choose a higher deductible to lower their monthly or yearly premium costs. There are other measures that might lower the cost of flood insurance. Bundling different home insurance policies is just one way to get a discount.


In most high-risk areas there is at least a 1 in 4 chance of being flooded during a 30 year mortgage. It is essential for every building, including commercial holdings, in those areas to have comprehensive flood insurance policies. Commercial coverage is more essential sometimes than even residential coverage. At least 25% of businesses that close after events like a flood never reopen. Without the support of a flood insurance policy it becomes almost impossible for a business to reopen. The claims for commercial properties are also on average much larger than those for residential. From 2008 to 2012 the average commercial flood claim was more than $75,000. The premiums can be quite high, but without the protection of flood insurance most businesses would fold. Some premiums for commercial coverage can be as low as $641 a year for both the building and contents. If a business owner just wants to protect the contents within a building they can pay a bargain price of $183 a year.

There are many different options for commercial properties to be protected from floods or water damage. The great thing about commercial coverage is that it gives you up to $500,000 of insurance to protect the building and an additional $500,000 to protect the contents. This is more than enough for most any small business to repair and recover. Flood insurance has become essential in many areas and even required in some high-risk zones. The cost is all based on location and make-up of the building.

Last year alone the National Flood Insurance Program paid $1.2 billion in flood insurance claims to all policyholders. The state with the largest in claim payments was Louisiana but there were claims made in all 50 states. It is more about the damage that a little water can do rather than what a hurricane or tropical storm causes. Only a few inches of water could cause tens of thousands of dollars. Even a car could be easily carried away by a few feet of water. Something like that can be covered by flood insurance. Residents in Minnesota have just as much to fear from water damage as those who live in New Orleans. Flood insurance may not be necessary in every state or location but it should be purchased to ensure protection.


Flood insurance has become more of a normal and standard insurance policy as the years go on. Cost of damages increases but there is also an increase in the kind of coverage possible. More than 5.5 million people currently hold flood insurance policies in the U.S. They are in thousands of different communities across the U.S. Countless more are affected by flood and water damage and do not have the benefit or support of flood insurance. They feel the brunt of flood damage and the monstrous costs that are associated with them. Even if they qualify for federal disaster assistance, that usually comes in the form of a loan that needs to be repaid with interest. When compared to the annual cost of flood insurance it becomes much more expensive.

The value of flood insurance is undeniable. It provides peace of mind to many homeowners and added security to renters. There are benefits that many people do not even understand or know about until the time comes when they are hit with a flood and their policy comes through to support them. You can even buy flood insurance for just possessions. Personal property is covered and things like clothes and furniture, that can be incredibly expensive to replace could be covered by flood insurance. There are some basic questions that all policyholders should ask their agents. They need to know what flood zone they live in. They should also inquire as to if they qualify for a preferred risk policy. The most important question to ask is what is covered under their policy as well as how their premium costs will change for building only coverage, contents only, or both building and contents coverage.  Insurance agents are the best option for any policyholder when it comes to questions about their flood coverage. It is important to remember that the potential benefits of flood insurance far outweigh the costs of the insurance coverage.

Other Enhanced Insurance articles related to Natural Disaster Insurance:

Does Homeowner’s Insurance Cover Flood Damage

Should I Buy Separate Flood and Earthquake Insurance Policies

Does Homeowner’s Insurance Cover Natural Disaster

Does Standard Homeowner’s Insurance Cover Hurricane Damage

Hurricane Exposure and Commercial Property Coverage

Earthquake Insurance

Hurricane Insurance

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