After seeing the historic flooding of Nashville, Tennessee, the question of “how much does flood insurance cost” is on many of our minds. After all, floods are devastating – and they’re not typically covered under typical homeowners insurance policies. National flood insurance is available through the National Flood Insurance Program.
As with most insurance, flood insurance rates vary based on amount of coverage and risk. For example, if you live in an area that’s prone to flooding, expect to pay more for flood insurance than someone who lives in a low risk area. Flood insurance is available for homeowners, condo owners, business owners, and renters.
According to FloodSmart.gov, the average flood insurance policy costs less than $570 per year. While that may be the average, that doesn’t mean you can expect to pay that amount. Again, it comes down to the flood risk and the amount of coverage you purchase. For example, if you live in a moderate-to-low risk area and you purchase $250,000 building and $100,000 contents coverage, you would qualify for a “preferred risk” policy with an annual premium of either $355 or $395 depending on if your home has a basement or enclosure.
On the other hand, if you live in a high risk area and purchase the same amount of coverage ($250,000 building and $100,000 contents), you can expect to pay an annual premium of $2633. The rates go up even higher for coastal areas (V zones). If you live in a V zone, you can expect to pay $5700 each year for the same amount of coverage.
To find out which flood zone you live in,
go to FloodSmart.gov or FEMA.gov and look up the flood maps for your community. You’ll first enter your state and county and then you’ll enter your city. From there, you should be able to view detailed flood maps for your area.
Once you know your home’s general flood risk, you can look up rates on the FloodSmart.gov site. This will give you a general idea of what to expect. You can also enter your address at FloodSmart’s site. This will create a flood risk profile. You’ll see the property’s flood risk as well as a range of estimated costs for coverage. In addition, a list of nearby insurance agents is generated. Note that the rates will not vary by agent.
While the cost of flood insurance could be pricey, especially if you live in a high risk area, consider the cost of flooding and water damage. Just three inches of water can cause over $7800 in damage. Eighteen inches of water can cause over $26,000.
Like regular insurance policies, it’s important to understand what your flood insurance policy does and does not cover. For example, if you purchase flooding insurance covering the building only, then the contents of the home damaged by the flood will not be covered. In addition, if your basement has been improved with flooring and finished walls, these improvements are not covered.
Depending on where you live, flood insurance may be more affordable than you realize. If nothing else, checking your home’s flood risk will help you better understand the potential for flooding in your area and start you thinking about preparing for the next disaster.