Nearly 200 Michigan Communities Can’t Get Flood Insurance — By Choice

Michigan might not make national headlines for flooding as frequently as Florida or Texas, but flooding in the Great Lakes State isn’t uncommon. Severe thunderstorms caused destructive flooding in Metro Detroit in 2021, leading to a presidential disaster declaration. And a low-pressure system drenched southeast Michigan in 2014, smashing historic rainfall records.

If Michigan homeowners want protection from flooding, they must buy flood insurance, as standard home insurance doesn’t cover flood damage. But homeowners can only purchase federal flood insurance if their community participates in the National Flood Insurance Program (NFIP) — and 194 Michigan communities don’t.

The Michigan counties with the most non-participating communities are in good shape to prepare for and recover if a flood disaster does hit them. They have high community resilience, per the Federal Emergency Management Administration’s (FEMA) National Risk Index.

However, just 1 inch of flooding can cause $25,000 of damage, according to FEMA. Without flood insurance, homeowners are on the hook for 100% of that cost.

“Flood hazards exist throughout Michigan,” Lauren Thompson-Phillips, a public information officer with the Michigan State Police Emergency Management Division, told Insurify. “Most communities in Michigan face some level of flooding risk, primarily due to natural hazards, though lakes, rivers, and urban stormwater runoff also pose threats.”

How the NFIP works

FEMA oversees the NFIP, which makes flood insurance available directly to consumers or through more than 50 insurance companies. Most property owners have access to NFIP coverage, and many mortgage lenders require borrowers in special flood hazard areas to buy flood insurance.

Community participation in the NFIP, however, is voluntary. Communities have to apply to participate, which involves adopting a resolution of intent to participate and to cooperate with FEMA. From there, communities must adopt and submit a floodplain management ordinance that meets or exceeds NFIP criteria.

Non-participating communities can’t receive federal disaster assistance or federal loans for development in identified hazard areas. And their residents can’t buy flood insurance through NFIP.

Michigan at a glance

Of Michigan’s 1,573 communities, 194, or 12.3%, don’t participate in the NFIP. Most are in counties with very or relatively low flood risk and high community resilience, according to FEMA data.

Only four counties (all in central or southeastern Michigan) have moderate or high flood risks: Macomb, Oakland, Saginaw, and Wayne — home to Detroit. Seven of the 194 non-participating communities are in those four counties, including three in Metro Detroit.

While FEMA classifies most of Michigan as having very or relatively low flood risk, low risk doesn’t mean no risk. For example, four communities in Michigan’s southeastern Washtenaw County don’t participate in the NFIP, and Washtenaw was among the hardest-hit municipalities during the 2021 storms.

Risk is shifting as climate change influences the frequency and severity of natural disasters. Federal agencies and insurers face the need to redefine risk for areas that have historically been considered low-risk.

Fortunately, Michigan’s risk is largely based on recent data. Though many areas of the country operate on decades-old flood maps, Michigan Floodplain Management and NFIP State Coordinator Matthew Occhipinti told Insurify FEMA is in the middle of a major flood map update for Michigan.

“Our maps were some of the oldest maps in the country, but FEMA has really been putting forth a gigantic effort in Michigan and other Great Lakes states to update the flood maps,” he said. “You’ll see a lot of currently effective flood insurance rate maps are now [from] the 2020s. Well over 100 communities have gotten new maps in the last few years and there’s a whole bunch more coming next year.”

Why do some communities choose not to participate?

Opting not to participate in the NFIP can be due to several factors, Occhipinti said, including available time and resources and lack of awareness. Cities or counties with planning and engineering departments are more equipped to create and implement a floodplain management ordinance. While some communities contract the work to the county, they may lack local capability.

“Where we see this are these very small, rural communities that generally don’t have the resources,” he said. “They’re not going to have a full-time staff like a city or county is going to have. A lot of them have volunteer or part-time staff that only work on township business for a couple of hours a month.”

While Occhipinti said most communities that don’t participate in the NFIP are generally not flood-prone or don’t have developed areas at risk, lack of awareness is sometimes a factor. His office has only a handful of people overseeing this for the entire state.

“With the high number of communities we have in the state, there’s a very high turnover in local officials, so just educating them on the basics of the National Flood Insurance Program is a constant challenge,” he said. “Trying to dispel misinformation, get communities the information they need, and train community officials as they turn over is definitely a challenge.”

Flood insurance is also an extra expense. While Michigan homeowners pay about $1,840 per year for home insurance, which is below the national average, it’s also among the states where rates are rising the fastest, according to Insurify’s home insurance report.

NFIP rates in Michigan are also below average, at around $832 per year, but rates vary depending on regional risk.

What’s next? What can consumers do?

Residents who want flood protection in communities that don’t participate in the NFIP can consider private flood insurance. Unlike the NFIP — which guarantees coverage, if at risk-based rates — private insurers may refuse coverage if they don’t want to take on the risk. Or they may request flood mitigation measures before insuring the property.

Residents can also get in touch with local government officials to ask about NFIP participation and advocate for adopting a floodplain management ordinance.

Community-level flood hazard mitigation measures vary based on specific risks and needs, Thompson-Phillips told Insurify. To date, 80 Michigan counties have completed a local hazard mitigation plan that includes planning for floods, such as investing in improvements to stormwater systems in urban areas.

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