Don’t Forget About the Flood Insurance

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Hurricane IAN’s landfall along the Gulf Coast marked an unprecedented event, particularly with the record-breaking storm surge it brought with it. This incident is a stark reminder of the importance of understanding the intricacies of homeowner’s insurance and the necessity for additional coverage in certain circumstances, such as flood insurance.

Homeowner’s insurance does provide a safety net for various forms of water damage. You are generally covered if the fierce winds of a hurricane propel debris through your windows, leading to rainwater damaging your interiors, such as carpeting, and wood flooring. However, this is where the straightforward part ends and the complexities begin. Damage resulting from flooding or storm surges, common aftermaths of hurricanes, falls outside the purview of standard homeowner’s insurance policies.

Why You Should Get Flood Insurance

It is essential to acquire a separate flood insurance policy to protect your home and belongings from natural disasters. This specialized insurance covers damages caused by rising waters and storm surges. Just like acquiring a separate windstorm policy to cover hurricane-induced damages, having a flood insurance policy becomes indispensable to safeguard your property and assets.

For residents in areas frequently affected by floods and hurricanes, flood insurance might not just be a prudent choice but a mandatory requirement, especially if required by the terms of your mortgage. Nevertheless, obtaining flood insurance is a wise precaution even for those residing in flood plains not officially designated as high-risk zones.

Factors That Can Affect the Cost of Flood Insurance

Costs can vary widely depending on several key factors. These factors include the location of your home, its elevation, the age and construction of the building, and the level of coverage you choose. Understanding these elements can help you gauge the potential costs of securing flood insurance for your property.

Location and Flood Risk

The geographical location of your property is one of the most significant determinants of flood insurance cost. Homes in high-risk flood zones, typically designated as Special Flood Hazard Areas (SFHAs) by the Federal Emergency Management Agency (FEMA), generally incur higher insurance premiums due to the increased likelihood of flooding. Conversely, properties in lower-risk areas may qualify for lower premiums.

Building Characteristics

The characteristics of your building, including its age, construction materials, number of floors, and the presence of a basement, can also influence flood insurance costs. For instance, older homes may be more expensive to insure if they must be up to current building codes that mitigate flood risk. Similarly, the cost can be higher for houses with basements or those constructed with materials more susceptible to flooding.

Coverage Amount and Deductible

The level of coverage you choose directly impacts the cost of your flood insurance policy. Higher coverage limits for your home’s structure and its contents will result in higher premiums. The deductible you select— the amount you pay out of pocket before your insurance coverage kicks in—can also affect your premium. Opting for a higher deductible can lower your insurance costs. However, it means you’ll pay more before receiving benefits from your policy.

Primary Residence or Secondary Residence

Insurance companies distinguish between primary residences, where homeowners live most of the year, and secondary residences. This differentiation is significant because secondary residences carry higher risks for various reasons. For instance, they have less frequent occupancy, which could delay the detection and mitigation of flood damage. Additionally, secondary residences are often used as rental properties, increasing their risk.

Rental Property Considerations

When a secondary residence is used as a rental property, it’s not just the building that needs protection; landlords must also consider the safety and protection of tenants’ belongings, potential loss of rental income, and liability coverage. These factors can influence the type and extent of flood insurance coverage required.

Short-Term vs. Long-Term Rentals

  • Short-Term Rentals: Properties rented out on a short-term basis, such as vacation rentals, often experience higher turnover and vacancy periods. These factors can increase the property’s risk profile, potentially leading to higher flood insurance premiums. Short-term rental owners must also consider additional coverage for personal property used by guests and loss of income coverage, which can compensate for lost rental income during repair periods following a flood event.
  • Long-Term Rentals: Long-term rental properties may have a slightly different risk profile, with more stable occupancy but still requiring consideration for the tenants’ safety and property. Landlords need to ensure that their flood insurance policy covers not only the structure but also provides some level of coverage for tenants’ personal property or encourages or requires tenants to purchase renters’ insurance, including flood coverage.

Flood Insurance Policy Types

The source of your flood insurance, whether through the FEMA’s National Flood Insurance Program (NFIP) or a private insurer, can also affect costs. NFIP policies have standard rates set by FEMA. However, private insurers may offer different pricing structures, including higher coverage limits or additional features unavailable through NFIP policies.

Elevation Certificate

An Elevation Certificate, which documents your home’s elevation relative to the expected flood levels in your area, can play a critical role in determining your flood insurance costs. Homes with favorable elevation near nearby flood plains may benefit from reduced insurance premiums.


For properties in areas where flood risk designations have changed, “grandfathering” rules can sometimes apply, allowing homeowners to benefit from lower rates based on previous flood maps. These rules can significantly impact insurance costs, especially if newer maps place the home in a higher-risk category.

Community Participation in NFIP

Your community’s participation in the NFIP and its adherence to floodplain management regulations can also influence your flood insurance costs. Communities that take proactive measures to reduce flood risk may secure lower insurance rates for their residents through the Community Rating System.

Given these variables, it’s essential to obtain a personalized quote to understand the specific costs related to insuring your home against flood damage. Consulting with insurance professionals and exploring NFIP and private insurance options can help you find the most appropriate and cost-effective coverage.

How much is covered by Flood Insurance?

The National Flood Insurance Program (NFIP), managed by FEMA, offers policies that cover both the structure of your home and its contents. However, the coverage has its limits. 

For instance, if the value of your dwelling exceeds $250,000, or if you seek to insure external elements like landscaping and decks, or if you require coverage for additional living expenses in the event of displacement, you’ll need to look beyond the NFIP offerings and consider policies from private flood insurance providers.

Private flood insurance presents options for supplementing your NFIP policy through excess coverage or securing a standalone policy tailored to your needs.

Given the complexity of insurance coverage and each homeowner’s unique situation and needs, our team, with its extensive presence across the state, stands ready to assist. We are committed to ensuring that you are well-informed and adequately protected against the unforeseen, helping you navigate the nuances of securing the most appropriate coverage for your circumstances.

Contact us if you need help