Just like car insurance or home insurance, it’s a type of property insurance that covers sustained water damage. Such policies are available to residential and commercial policies and cover damage sustained by a vis major event such as a flood. Flood insurance statistics show that heavy precipitation is the leading culprit, but other factors can surely lead to flash floods that can cause heavy water damage in your home.
Flood insurance policies cover flooding is an event caused by a variety of factors. It can be anything from heavy rainfall, melting snow, blocked storm drainage systems, levee dam failures, etc. Flooding insurance is rarely covered by standard insurance packages. Although some cover it, you’ll most likely find it listed under premium insurance packages.
To learn more about flood insurance and the situation in the US, just keep on reading.
Most Essential Flood Insurance Stats
- Floods are the most common and deadliest natural disaster in the US.
- All 50 states are at risk of floods and flash floods.
- 9 out of 10 homes in the US are not insured for floods.
- Louisiana has the highest percentage of flood-insured homes of all states.
- 2.4 million damage claims have been filed since the 1970s.
What Is Flood Insurance and What Does a Flood Insurance Policy Cover?
Flood policies fall into the category of catastrophe insurance. However, they differ from the basic hazard insurance coverage you will find listed in a homeowner’s insurance policy. In these policies, interior water damage from a burst pipe, tornadoes, and snowstorms are all covered, but there’s no insurance against the damage sustained by floodwaters.
Purchasing flood insurance often comes at a premium price paid annually, based on the property’s flood risk. The homeowner will receive cash from the insurance company to cover the damage sustained in the case of a flood. If you live in an area with a high risk of flooding, this type of insurance is required coverage when applying for a property mortgage in said area.
As mentioned, this type of insurance policy is generally excluded under homeowners and renters insurance policies. Luckily, the National Flood Insurance Program (NFIP — managed by FEMA) offers flood policies to homeowners in participating communities via private insurers, but at a government-set rate. This means that you’ll pay extra for it, but if you live in a floodplain, it’s the smart thing to do.
If you’re getting new home insurance or renewing your policy, make sure to check if it covers floods. If you live in a high-risk flooding area, a specific FEMA policy requires you to buy flood insurance.
Of course, this mostly depends on your location. Low-risk flooding areas are rarely covered by the NFIP. Flood maps are outdated in some regions; hence, the lack of accurate data regarding floods in your region might be an obstacle to getting a flood policy. If you live in an area with regularly updated FEMA flood maps and you believe that you’re at risk of floods, you can get a policy from the NFIP that covers water damage to your home and belongings.
General Stats and Facts on Floods
- Floods are the most common natural hazard in the US
Did you know that floods are the biggest natural hazard in terms of lives lost, as well as overall property damage in the US? They can occur at any time of the year, practically anywhere, considerably raising the risk of home flooding across the country.
Now, when it comes to flooding, statistics show that heavy rainfall is the main reason for property damage in most cases. Hurricanes, snowstorms, and snowmelt are also some of the major culprits for sustained property water damage.
Source: American Rivers
- No US region is safe from flooding
There isn’t a single region in the US that is safe from flash floods. All the 50 states are at risk of flooding; meaning, there’s no “safe spot” where you can buy a property and sleep calmly at night knowing that floods won’t surprise your area.
Flood insurance statistics show that hurricanes that hit the US every year cost the country billions of dollars. Flooding is a serious problem in the US and the lack of information and up-to-date flood maps are the main reasons why many overlook it.
Source: Do Something
- Floods are the deadliest weather-related disaster in the US
The number of lives lost due to floods in the US went down in 2018 compared to previous years. Still, with 80 lives lost, floods are the deadliest weather-related disaster in the US of all time; the average number of deaths related to floods is 82 (annually).
Source: Restoration Master Finder
- 2015 was the deadliest flood year in American history
Flood stats that cover the period from 1995 to 2018 show that 2015 had the highest number of flood-related fatalities — 176. Since then, the numbers have dropped to “just” 80 in 2018.
- The deadliest natural disaster in American history was the Hurricane of 1900
The deadliest natural disaster in American history took place over a century ago. According to flood insurance statistics, it killed between 6,000 and 8,000 people (official and unofficial stats combined).
Source: Live Science
- Hurricane Katrina killed around 2,000 people
The deadliest natural disaster in recent history, the Category 5 Hurricane Katrina, claimed the lives of nearly 2,000 people. It caused massive damage and left thousands of people without a home in New Orleans and the surrounding areas. With wind speeds of over 280 km/h, the 2005 hurricane cost the US approximately $161 billion in damages according to national flood loss reports.
An Overview of Homeowners Without Flood Insurance
- 9 out of 10 US homes don’t have flood insurance
The number of homes without flood insurance in the US is extremely high, especially in high-risk areas such as Iowa and Nebraska.
With another hurricane season expected later this year, these numbers are concerning and indicate that we must take flooding rather seriously.
- Minnesota and Utah are on the deep end of the homeowners-not-having-flood-insurance statistics list
Compared to other states, Minnesota and Utah have the lowest rate of coverage when it comes to flood insurance in the US. The number of flood-insured homes in these states is fairly low. If we take into account the fact that no state in the US is safe from flooding, these numbers are a great cause for concern.
The official NFIP and FEMA data say that only 0.6% of Minnesota homes have flood insurance just like in Utah.
Source: Market Watch
- Federal funding is the only way to cope with water damage for those without flood insurance policies
Residents that live far from the cost were quite blindsided by the immense water damage in 2018 when Hurricane Florence ravaged North Carolina. The damage was far above the predicted dangers for inland countries with millions of dollars in unexpected damages, especially to homes without flood insurance.
For these people, the only way to cope with the damage is to seek help from the US government flood insurance plan that can cover a part of the sustained damage.
Source: Business Insider
Homeowners with Flood Insurance — The Numbers
- Louisiana has the highest percentage of flood-insured homes
Louisiana has the highest number of flood-insured properties across the US with 44%. This shouldn’t come as such a surprise after Hurricane Katrina ravaged the state. Of course, most of these policies come as a courtesy of government flood insurance.
Florida is second on the list with 36% in front of Hawaii (23%), South Carolina (16%), and New Jersey (11%).
Source: Market Watch
- Around 1 in 3 people now buy flood insurance in Texas after Hurricane Harvey
After Hurricane Harvey ravaged Texas in 2017, the number of flood insurance policies bought suddenly went up. Most homeowners bought it because it was required for a mortgage, but many got policies from a private flood insurance provider.
- Most Americans nowadays purchase flood insurance policies voluntarily
Although the total number of policies bought is on the decline, most Americans are buying it voluntarily. This means that we’re becoming increasingly aware of the danger that floods and flash floods present. For example, 78% of homeowners in Houston purchased it voluntarily after experiencing the mighty hurricane firsthand.
Flood stats show that, overall, 60% of Americans purchase such policies voluntarily compared to just 40% who buy it because their mortgage requires one.
Where to Get Flood Insurance
- NFIP/FEMA is your best bet when living in floodplains
With costs topping $8.2 billion annually, as well as average water damage costs of $27,000 per household, flood insurance policies should be a priority for everyone living in floodplains and high-risk areas. The good news is that the National Flood Insurance Program offers great deals through many insurance agents at low rates.
The affordable plan aims to cover all US households with flood insurance.
- The NFIP policy covers several items
NFIP flood insurance policies cover the insured building and its foundation along with other items. For example, it covers the costs of water damage done to the electrical and plumbing systems, refrigerators and other kitchen items, as well as permanently installed carpeting, paneling, wallboard, and more.
However, the US government home flood insurance doesn’t cover personal belongings, portable items, and valuable items.
- NFIP flood insurance rates don’t differ from agent to agent
The NFIP has set a fixed list of insurance rates that are the same across all agencies. Policy premiums include fees and surcharges you should ask your agent about. The amount you pay is based on different factors including the year of the building, the number of floors, occupancy rates, flood zones, and more.
When discussing a flood insurance quote, it’s vital to provide this information in order to see how much the policy will cost. The average policy obtained through NFIP is $699 per year.
- Private insurance companies sell premium policies as well
Besides the US government, you can buy a premium flood insurance policy from private providers too. The cost is usually higher than NFIP’s policy and this type of insurance isn’t available in all the 50 US states.
The rates are affected by your distance to the water’s edge and not by state borders. On average, the price is over $427 annually in Texas’ B zone and lower; over $2,800 in the A zone, and over $13,000 in the V zone. A flood insurance provider ensures that the policy covers both your building and personal property, unlike the NFIP that requires you to buy two separate policies.
Source: Value Penguin
Flood Claims and Insurance Policy Statistics
- The NFIP has seen over 2.4 million flood damage claims since 1970
The Federal Emergency Management Agency or FEMA has seen its fair share of flood damage claims over the years. FEMA says that there have been over 2.4 million damage claims in the past 50 years, which represents over $70 billion in payments. In addition, the flood insurance claim history dates back to the 1970s and includes data from over 50 million policy transactions.
- Flood insurance claims are increasing across the country
The number of claims is on the rise even in areas nowhere near the shore. Major flood disasters that occurred in 2008, 2012, and 2017 have seen flood insurance claims soar sky-high — hence why experts are adamant that the numbers will continue to climb.
When it comes to the National Flood Insurance Program, damage claims parallel the increasing frequency of extreme rainfall occurring in the US.
Source: Climate Signals
- NFIP flood insurance claims are paid out even when a disaster is not declared by the President
FEMA’s disaster assistance is only activated after a flood has occurred. On the other hand, buying a flood insurance policy means that you’ll get paid for the damage sustained even without a Presidential disaster declaration.
This ensures that you’ll be reimbursed for the damage sustained in your home after a flood that the NFIP policy covers.
- Private insurer claims on the rise as well
Private flood insurance statistics show an expansion of claims as well. Although private insurers couldn’t compete with subsidized rates in the past, competitive pricing and packages have made private companies a great alternative to the NFIP.
Source: Public Policy
Tips to Save Money on Flood Insurance
Before you rush to buy any flood insurance policy, you need to do your research. First and foremost, be sure to check the insurance claims history report for your area. This will help you find out more about the potential risk of floods and flash floods in your district and whether eventual water damage will be covered by either the NFIP or by private insurers.
Other factors should also be taken into account. Before you buy property anywhere, check the flood maps to see whether it’s near any known flooding areas. Even if it’s not, buying a flood insurance policy is a good way of ensuring oneself of any eventual water damage being covered by the policy.
Making adjustments to your property is advisable. No matter whether you’re insured through NFIP or you have private flooding insurance, adjustments such as base flood elevation and flood openings can help you save up to 30%.
With extreme storm frequency in the past decade and hurricanes worse than Harvey expected in the future, flood insurance policies are a must. Check your options carefully and see which ones you can afford. There are great deals out there that can help you sleep easier at night knowing that your property is properly insured.
Frequently Asked Questions
1. How do I get flood insurance?
You can buy flood insurance through the NFIP or via private insurers. Make sure to check what it includes and talk to an agent about the pricing before you get a policy.
2. Is all flood insurance through NFIP?
No, there are many private insurers that offer premium flood insurance. The pricing will be different from agent to agent, unlike the NFIP which has a flat rate.
3. Who is required to purchase flood insurance?
People living in high-risk flooding areas with government-backed mortgages are required to get flood insurance.
4. What is the average flood insurance claim?
Flood insurance statistics show that the average claim per year is $43,000.
5. Does flood insurance cover clean up?
General clean-up in the yard or property is not included. However, premium flood insurance may cover removing debris in the insured property.