Flooding is the most common and costly disaster in the U.S. — and the approach of warmer weather signifies flooding, with damage ranging from a little seepage to total home submerging.
Yet many are unaware of the dangerous implications of increased flood risks, and no area is immune to flooding. Unfortunately, flood damage isn’t covered by standard homeowners’ insurance policy, and according to the U.S. Federal Emergency Management Agency (FEMA), a single inch of floodwater can cause as much as $25,000 in damage.
While some homeowners may feel secure, flooding risk is getting worse: In addition to the 8.6 million properties in known flood zones, another 1.7 million will be at risk for flooding in the next 30 years. That includes properties in places not associated with flooding, including Cleveland, New York City, San Diego, Jacksonville and Virginia Beach. As many as 20% to 30% of flood insurance claims occur in moderate to low risk areas not considered flood zones.
The National Flood Insurance Program (NFIP) recently released its Risk Rating 2.0 with new ratings for some areas, scheduled to roll out in October 2021. (The new rating plans account for flooding in low-to-moderate zones as well.)
When $250,000 of coverage isn't enough
A government-backed NFIP policy covers up to $250,000 for a home’s structure and $100,000 for contents. But for many, this isn’t enough. And with the NFIP running a large deficit,3 homeowners are looking for other, more secure options.
In addition, NFIP policies have limited coverage in basements. Be sure to speak with your HUB broker to discuss any coverage gaps in flood coverage and ways to try and fill those gaps.
To avoid getting caught with inadequate insurance, homeowners have the ability to buy larger limits through the private flood markets.
When meeting with your HUB broker, NFIP’s Flood Insurance Rate Maps (FIRM) can help provide an overview flood risk assessment for communities in high, moderate-to-low and undetermined risk areas to determine how to best augment your homeowner’s policy with flood insurance.
Private flood insurance specifically covers flood damage, compensating for what a homeowner’s insurance policy doesn’t handle.
An insurance professional who knows the market can assist in navigating specific flood insurance options and advise you on minimizing water damage loss, buying excess flood coverage and getting the right insurance for backup of sewers and drains.
Strong summer storms and flooding are coming. You will want to contact your broker sooner than later because there’s typically a 30-day waiting period before coverage goes into effect.
As a homeowner, understand that because flood damage isn’t protected under your general homeowner’s insurance policy, you should consider a dedicated flood insurance policy with the right limits and eliminate any gaps in coverage.
Your HUB broker can review flood maps for your area and recommend coverage that can protect you from potentially devastating consequences due to flooding.
[1]FEMA, “Flood Insurance,” accessed June 17, 2021
[2]Environmental Defense Fund, “More Americans are at risk of flooding than ever before. Here’s how to address this new reality,” July 15, 2020.
[3]CNBC, “2020 hurricane season is busiest ever recorded, and NFIP faces over $20 billion debt,” November 18, 2020.