Floods Are Getting Worse. Are You Covered?


It’s hurricane season again, and this year is looking worse than ever. The National Oceanic and Atmospheric Administration has predicted a total of 15-21 named storms, including 7-10 hurricanes, 3-5 of which may become major hurricanes.1

In fact, hurricanes are becoming stronger, rainfall heavier, and flood risk higher. Damages from Hurricane Ida alone are estimated to top $15 billion — much due to flooding.2 Given climate change and the growing likeliness of more frequent and severe weather events, it may be time to consider federal flood insurance.

Are You Prepared?

Although wind damage is usually covered under a typical homeowner’s policy, flooding is not. It may cover certain types of water damage, such as that resulting from a leaky roof, a broken water pipe, or a cracked water heater. But damage from a real flood — a river or stream that flows over its banks or storm waves that surge over the coastline — usually won’t be covered by homeowners or renters policies. To insure against floods, you must purchase special flood insurance, generally offered only through the government-run National Flood Insurance Program (NFIP).

Whether flood insurance is right for you will depend upon a number of factors. Ask yourself these four questions.

  1. Is it available? Contrary to popular belief, flood insurance is not restricted to properties located in flood-prone areas like beaches or riverfronts. It is generally available in communities that adopt and enforce what Federal Emergency Management Agency (FEMA) considers sound floodplain-management practices. To find out whether your community participates in the flood insurance program, contact your local government or one of the resources provided by the NFIP.
  2. Do you need it? As countless property owners have learned the hard way, if you live in a flood-prone area, the waters are likely to rise at some point — and the longer you live there, the greater the chance you’ll experience a flood, especially given climate change. You may want to hedge your bets and consider flood insurance well before a hurricane or major storm is on the way.
  3. What does flood insurance cover? Most flood-related damage is covered under an NFIP policy. Although you can buy flood insurance through your insurance agent, the policy and coverage generally come from the NFIP. Read this summary of what’s covered and what’s not.
  4. How much does it cost?The average flood insurance policy obtained through NFIP currently runs $734 per year.3 But premiums vary widely, depending upon coverage, deductibles, and other factors. What’s more, they are all about to change.


Overhaul Ahead

Starting on October 1, NFIP is changing its pricing structure to make rates more accurately reflect each property’s unique flood risk. Pricing will now factor in a home’s replacement cost, its specific flood risk, and the proximity of the property to the potential flood source. Most important, the program will now factor in future catastrophic modeling from climate change, including sea level rise, drought, and wildfires. Rates will go up for some properties and down for others, but the average policyholder is likely to see a 10% increase.

If you already have an NFIP policy, make sure you know how these changes will affect you. If you are considering flood insurance for the first time, make sure to investigate your options regarding cost, deductibles, coverage, and other factors. For more information, contact the NFIP.


1Source: National Oceanic and Atmospheric Administration, Atlantic hurricane season shows no signs of slowing, August 4, 2021.

2Source: Wall Street Journal, Firms Estimate Hurricane Ida Could Cause Over $15 Billion in Insured Losses, August 31, 2021.

3Source: ValuePenguin by Lendingtree, Average Cost of Flood Insurance 2021, September 8, 2021.


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