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Do I Need Flood Insurance in 2023? How To Protect Yourself From Unexpected Damage


“I don’t need Flood Insurance,” a thought that has gone through many homeowners’ minds, especially if they don’t live near a body of water. Also, probably one of the most regretted statements ever made. Many people don’t know that flooding occurs in EVERY STATE and can happen away from large bodies of water.

Some people also assume that homeowners insurance covers flooding or that they don’t need flood insurance if they rent. If only it were that simple. Let’s discuss flooding, its causes, who needs flood insurance, and why.

What Causes Floods?

Flooding occurs when land that is usually dry overflows or is submerged in water. It’s generally caused by heavy rainfall, rapid snowmelt, or storm surge from a hurricane. It is also the most common natural disaster.

Another cause of flooding is new construction and paving. It can change the land’s ability to drain properly and cause flooding in areas that were not originally at risk. So areas initially zoned as low-risk can quickly become high-risk as new construction and development change the landscape. That’s why it’s a good idea to have a flood insurance policy.

Does Homeowners Insurance Cover Flood Damage?

No. No, it does not. This is a common misconception that, unfortunately, leaves a lot of homeowners “stranded” when a flood does occur. The same goes for business owners or renters; those insurance policies usually do not cover floods. 

If you think or are 100% certain your insurance covers flood, we recommend calling your agent just to confirm. What would it hurt? 

Who Needs A Flood Insurance Policy?

As mentioned above, flooding is a common natural disaster, and unexpected circumstances can cause it. So even if you don’t live on the coast, it’s a good idea to carry flood insurance or at least speak to an agent to see if it may be a good choice for you.

 and  owners are equally at risk. You can check whether you are in a high or low-risk area using this  provided by FEMA. Being in a high-risk area could mean a higher rate; however, the average flood insurance claim in 2021 was $44,401. Only a few home or business owners have that kind of safety net. 

Some people may choose to rely on Federal disaster assistance, which comes in two forms. One is a loan, which must be paid back with interest, and the other is a FEMA disaster grant, which is about $5,000 on average per household. Still not going to cover that average of $44k in damage. A flood insurance policy provides peace of mind, especially considering that just 1 inch of floodwater can cause $25,000 in damages. 

According to FEMA, $985 was the average annual NFIP policy premium in 2021. Now, this is an average number, and your risk factor plays a role in your premium. But when the numbers to restore your home and chances of a disaster are so high 鈥 how much would you pay for the comfort of knowing your home or business is covered when the unexpected happens?

What is an NFIP Policy?

NFIP is the National Flood Insurance Program. It is managed by FEMA and is delivered to the public by a network of more than 50 insurance companies 鈥 including us! The government uses specific metrics and sets the rates for these types of properties, so they are the same regardless of the carrier you choose. At the end of the day, it’s best to choose a carrier you trust. 

Flood insurance can be mandatory. The federal government requires mortgaged properties in Special Flood Hazard Areas (SFHA) to be insured against flooding. The National Flood Insurance Program has changed how it determines flood risk and flood insurance prices with Risk Rating 2.0. 

Risk Rating 2.0 is a transformational leap forward. It enables FEMA to set fairer rates and ensures rate increases and decreases are fair. Rates are easier to understand and better reflect a property’s flood risk for more individualized coverage and cost.

With the new risk rating, FEMA has the ability and tools to address rating differences by including more flood risk variables. These include flood frequency, multiple flood types鈥攔iver overflow, storm surge, coastal erosion, and heavy rainfall鈥攁nd distance to a water source, along with property characteristics such as elevation and rebuilding cost.

Do I Need Flood Insurance? Talk To An Agent

It’s important to understand what a flood is and the risks it poses to your home or business. We hope this blog has given you some of that information. is another great resource with countless tools that can help guide you in the right direction. But if this is all a little overwhelming, or you’d rather not do the research yourself, feel free to get in touch with us to . We’re happy to guide you through the process.