Why your home needs flood insurance

Flood insurance is one of the most important protections you need if you live in a flooded area.

In our previous article we talked about some interesting facts about flood insurance, but in this article we will discuss various reasons why you need flood insurance, the cost of flood insurance by state, the coverage and possibly how you can get an affordable flood insurance rate in the United States.

1. Home insurance does not cover flooding

Although homeowners insurance policy covers lightning strikes as well as volcanoes and anything else that falls like a tree from the sky and damages your roof, it doesn’t cover flooding.

To get some level of financial protection if rain hits your building, you need flood insurance from an insurer in your area.

2. Most homes in the United States are at risk of flooding

In the United States, 142 homes and lots were assigned a flood risk score by the First Street Foundation. A tool like Flood Factor is a free way to learn if a property has had a history of major flooding, is currently at risk, and how that risk is changing over time.

3. Areas with low risk of flooding are more risky than you think

How much does flood insurance cost?

People living in a low- to moderate-risk zone can still experience devastating flooding, according to a FEMA report. Your odds are about five times higher than a fire over a 30-year period. According to flood insurance statistics, homes in these zones account for about one-fifth of all flood insurance claims.


4. 100-year floods may occur more frequently than expected

The term “100-year flood” is used to simplify the definition of a flood that statistically has a 1 percent chance of occurring in a given year.

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How often do 100-year floods occur? Over the course of a million years, these 100-year floods can occur 10,000 times. However, we have had cases where it happened more than once a year.

In the mid-2000s, Goffstown, New Hampshire, USA experienced 100-year floods twice in one year.

5. Floods are one of the most common natural disasters in the United States

In the United States, especially in states like Texas, Florida, and Louisiana, the most common natural disaster is flooding.

How Much Flooding Has Cost the United States and British Government

According to the Insurance Information Institute, flooding contributes to 90% of all natural disasters.

6. Repairing flood damage can be very expensive

In 2019, the effects of flooding and flash flooding in the United States caused approximately $3.75 billion worth of property and crop damage.

Just an inch of water in your yard can result in such a huge loss in profits. A foot of flash flood is enough for cars to start floating.

In England, around 2.4 million people live in flood-prone areas. To ensure these residents have a smooth life, the UK government is spending £4.4 billion on flood defenses. While others wait for government help, your flood insurance will help you save on the cost of repairing and replacing damaged properties.


7. Waiting for FEMA may not always help you

Joe Biden discusses flood disaster with FEMA
Image source: CNN

There are instances when FEMA will step in fully to help you, but that can only happen if the US President declares it a disaster. Unfortunately, this is not the case for all flood events.

Also, most FEMA assistance comes in the form of a soft loan. Not everyone is lucky enough to get a grant from FEMA, and even if you do, it may not cover as much as your flood insurance policy would have.

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8th. Flood insurance is not expensive

Flood insurance premiums are determined by a number of factors, such as: B. Your community rating system and coverage types. Homes in medium to low risk areas can qualify for a Preferred Risk Policy for as little as $129 per year. That’s an amount you can easily afford over 30 years compared to applying for a federal disaster relief loan at 4% APR.

What does your flood insurance cover?

Flood insurance covers the costs of:

  • remove debris.
  • Professional fees (such as lawyers, architects and appraisers)
  • Repair or replacement of damaged furniture and items.
  • alternative accommodation while not being able to live in your home.
  • Drying out, repair and restoration of your property and its furnishings.

How much is flood insurance in the United States?

If you work with the best insurance company in your area, the average cost of flood insurance in the United States is $958 per year.


The following table explains flood insurance costs by state:

Cost of Flood Insurance by State

Federal State Average annual cost Average Monthly Cost % households with flood insurance
Alabama $699 $58 4.03%
Alaska $913 $76 1.36%
Arizona $720 $60 1.58%
Arkansas $933 $78 1.81%
California $865 $72 2.87%
Colorado $944 $79 1.30%
Connecticut $1472 $123 3.75%
Delaware $752 $63 9.93%
District of Columbia $817 $68 1.72%
Florida $597 $50 32.95%
Georgia $694 $58 3.27%

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