Flood Insurance: What It Covers and Costs
Flood insurance costs $786 per year, on average, and can provide coverage for flood-related damages that traditional home insurance doesn’t cover.
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More than 40 million homes in the United States are at risk of serious flooding, according to American Rivers. As a homeowner, protecting your home is key — but home insurance can be expensive. And the last thing you may want to do is purchase yet another form of coverage, like flood insurance. But buying flood insurance may provide critical protection.
A standard home insurance policy excludes flood damage, so flood insurance is necessary if your home is at risk of damage from rising water. Whether it’s river overflows or floods from melting snow, flood insurance can help with the cost of repairing your home and replacing your belongings. This coverage can be vital, as 1 inch of floodwater can cause $25,000 of damage.[1]
Below, learn what flood insurance covers, how much it costs, and where you can purchase a policy.
Quick Facts
What is flood insurance?
Flood insurance isn’t just for beachfront properties. It can be helpful for properties near lakes or rivers, those that are subject to floods from melting snow, and homes in regions prone to hurricanes.
Standard homeowners insurance excludes damage from floods, but flood insurance complements an existing home insurance policy.
Flood insurance reimburses you for losses due to flooding, which is defined as two or more properties or acres of normally dry land that are partially or completely submerged by water from one of the following sources:
Overflowing inland or tidal water
Quick surface water runoff
Mudflows
Collapse or sinking of land along a body of water
Unlike a burst pipe or roof leak, which homeowners insurance covers, flood insurance covers rising water from outside your home.
You can purchase coverage through a private insurance company, but most flood insurance policies are sold through the NFIP, a program run by FEMA.
NFIP policies are subject to different coverage caps and waiting periods than private coverage, but NFIP coverage is more widely available and may be more affordable. It could also be a viable option if you can’t get coverage through a private insurer.
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How much flood insurance costs
Flood insurance may be more affordable than you expect. The median cost of flood insurance through the NFIP is $786 per year, according to FEMA data. Coverage is cheaper in Alaska, where the median rate is $412 per year. By contrast, Massachusetts had the highest rates; the median annual cost is $1,106.
In 2021, FEMA launched a new approach to pricing called Risk Rating 2.0. This rating system uses technology to better determine risk, and it takes into consideration factors like property value, flood frequency, flood types, distance to a water source, and a property’s characteristics.
This approach caused some homeowners to see changes to their premiums. Some saw increases, and others saw decreases due to the changed rating system.
Below are examples of how premiums can vary based on risk. Remember, quotes vary based on your home’s construction, location, and value.
Property at 4 Feet Below Base Flood Elevation (BFE) | Property at BFE | Property at 3 Feet Above BFE | |
|---|---|---|---|
| Annual premium | $9,500 | $1,410 | $427 |
*Premiums are hypothetical based on $250,000 of building coverage for a single-family, one-story home without a basement.
Who needs flood insurance?
If you live in a high-risk flood zone, your mortgage lender will likely require you to purchase flood insurance. But even if you don’t live in a high-risk area or your lender doesn’t require it, purchasing flood insurance can still be a smart decision since one-third of NFIP flood insurance claims came from outside high-risk flood areas.
You may consider flood insurance if any of the following scenarios are true for you:
You live in an area designated as a high-risk flood zone.
Your home previously had flood damage or losses.
You’re near a coastline, river, or lake.
You have a basement.
You have a single-level home.
Your area has had recent flood damage.
You can use the Floodsmart Flood Risk tool to determine your property’s risk level.
Important Information
If your property was previously affected by a flood and received federal disaster assistance, you must have flood insurance to qualify for future assistance. This requirement follows the property, not the homeowner.
If you purchase a home that was previously affected by a flood and its owner received federal assistance, you must have flood insurance to maintain your eligibility for federal assistance.
What flood insurance covers
Flood insurance provides coverage for damage from river or lake overflows, heavy rainfall, flooding from melting snow or ice, and water seeping through a dam.
Flood insurance has two components: building and contents coverage. Each type is usually purchased separately, and each has its own deductible. The NFIP caps residential building coverage at $250,000 and non-residential buildings at $500,000. Policies purchased through private insurers may offer higher caps.
Building/dwelling coverage
Building or dwelling flood coverage pays for the structure and key components of your home, including:
Detached garages
Electrical systems
Foundation walls and staircases
Furnances
Permanently installed cabinets
Plumbing systems
Refrigerators, stoves, and built-in appliances
Water heaters
Contents coverage
Contents coverage protects your belongings, including:
Area rugs
Artwork and furs (a maximum limit of $2,500 applies to NFIP policies)
Clothing
Electronics, such as a television or laptop
Furniture
Microwave
Washer and dryer
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What flood insurance won’t cover
Flood insurance protects you from direct physical losses from floods. It doesn’t cover:
Sewer backup or seepage of water (unless a flood damages the property at the same time)
Water or moisture damage caused by an issue affecting only one property
Losses related to the policyholder’s failure to take reasonable measures to protect their home after a flood
Losses already in progress when the policy goes into effect
Flood insurance policies are supplemental to homeowners insurance policies; you’ll likely need both forms of insurance.
NFIP vs. private flood insurance
NFIP and private flood insurance policies both provide protection against flood damage. But they differ in terms of coverage limits and add-ons.
Private flood insurance can vary in cost, but it may provide more flexibility and customization than NFIP coverage. You can typically get a policy with higher coverage limits for both the building and contents of your home with a private insurer, and private insurers may offer replacement cost coverage for the contents.
Private insurers often sell loss of use or additional living expense (ALE) insurance too, so you can get some help with the cost of temporary housing if your home needs repairs.
But private insurers may not be available in all areas. Some insurers may refuse to insure customers in certain high-risk areas, so NFIP coverage may be the only option.
With NFIP coverage, your premiums are due on an annual basis, while you can pay private insurance premiums annually or monthly.
The table below breaks down some of the key differences between NFIP and private flood insurance policies.
Component  | NFIP | Private Flood Insurance |
|---|---|---|
| Coverage limits | Up to $250,000 building Up to $100,000 contents | Up to $500,000 or more building Up to $250,000 or more contents |
| Replacement cost coverage for contents | No | Yes |
| Replacement cost coverage for building | Yes | Yes |
| Loss of use coverage | No | Yes |
| Waiting period | 30 days | Varies by company, but usually between 0 and 15 days |
How to buy flood insurance
To purchase a flood insurance policy, follow these steps:
Review coverage requirements. If you purchase a home with a mortgage, your lender may require you to have flood insurance, and you may have to meet certain coverage requirements.
Gather property details. You can save time by collecting some details about your property before requesting a quote. In general, insurance companies will ask for information such as your building type, square footage, construction date, number of stories, and building foundation type.
Request a quote through the NFIP. You can request a quote for an NFIP flood insurance policy or find flood insurance companies through FloodSmart.gov.
Contact an insurance agent. If you have an auto or homeowners insurance policy, contact your insurance agent to find out whether you can buy flood insurance through your current insurer.
Get several quotes. Request several quotes from private insurers to compare policies and costs between NFIP and private coverage.
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How to save on flood insurance
You can save money on a flood insurance policy with these tips:
Get an elevation certificate
An elevation certificate involves an inspection by a licensed surveyor or engineer. The certificate shows your home’s elevation relative to your community’s base levels. It’s a tool insurers use to determine your home’s risk of flood damage, so a home with a higher elevation can qualify for discounts.
Implement flood mitigation
Filling in your basement or installing flood openings can reduce the risk of flood damage and help you save money on your policy.
Increase your deductible
Raising your deductible will increase your up-front cost for repairs, but you’ll pay a lower premium.
Shop around
If you live in an area where multiple private insurers sell flood insurance, request quotes from several companies to find the best rates.
Flood insurance FAQs
As a homeowner, flood insurance can be a necessity. The following information can help you as you shop for a flood insurance policy.
Is flood insurance worth it?
Even if you live outside of a designated flood area, flood insurance can be well worth the cost. Just 1 inch of water can cause severe damage, so a single flooding event can justify the policy premiums.
Do you have to buy flood insurance if you’re not in a flood zone?
While you don’t have to buy flood insurance, it can be a good idea. Flood insurance is relatively affordable, and if your home experiences water damage from storms or flash flooding, it can provide critical protection.
How much does flood insurance cost per year?
The median cost of a flood insurance policy is $786 per year, but your actual cost will depend on your building coverage, contents coverage, and whether you purchase insurance through the NFIP or a private insurer.
Can you get flood insurance for more than $250,000?
The NFIP caps coverage at $250,000, but you can usually purchase an excess flood insurance policy through a private insurer.
Methodology
Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.
Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:
Default Coverage Assumptions
- Dwelling coverage: $300,000
- Deductible: $1,000
- Personal property limit: $25,000
- Liability limit: $300,000
Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.
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Sources
- Floodsmart. "Understanding the real cost of flooding."
- Floodsmart. "FAST FACTS ON FLOODS & FLOOD INSURANCE."
- FEMA. "Cost of Flood Insurance for Single-Family Homes under NFIP’s Pricing Approach."
- Floodsmart. "Talking points."