How Much Does Flood Insurance Cost on Average?

64 percent of Americans are homeowners.

If you’re one of these people, you’re certainly enjoying the perks of homeownership. There’s nothing as blissful as leaving work and knowing you’re heading to your home. You can keep as many pets as you want, customize it to your tastes…the list can go on and on.

However, with homeownership comes big challenges. Especially if your home is in an area that’s prone to floods, there’s a chance floods can damage it.

The good news? You can purchase flood insurance to cover your risks.

But how much does flood insurance cost? Keep reading to find out.

How Much Does Flood Insurance Cost?

You’re reading this article because you want a straight-up figure, right?

Well, if you obtain your flood insurance through a program like the National Flood Insurance Program, expect to pay about $708 per year. Expect to pay a little bit over this amount if you purchase your insurance from a private insurer. A private insurer, in this context, is a company that offers flood insurance policies that aren’t underwritten by the NFIP.

Now, why do we say you should expect to pay “about $708” per year? It’s because there’s no standard figure for the cost of flood insurance. What you will pay certainly isn’t the same amount your neighbor will pay.

There are several factors that affect the cost of flood insurance.

Below, we’re diving into some of these factors.

Your State

That’s right. The state in which the home you want to insure is located will have an impact on your flood insurance premiums.

You’re probably wondering, “But what’s my state got to do with my flood insurance?”

There are a couple of reasons insurance premiums (for any type of insurance) vary from state to state, including market dynamics and rate of flood insurance claims. For instance, if insurance companies in a certain state receive a high number of claims than another state, it’s likely that flood insurance will be costly in the state with a higher number of claims.

According to research compiled by ValuePeguin, Vermont, Connecticut, and Rhode Island are the most expensive states to purchase flood insurance. In any of these states, you’ll pay $1,400 annually.

On the other hand, Florida, Maryland, and Texas are the cheapest, with annual premiums come in at just over $500.

So, if you’re in the process of buying a home and the cost of flood insurance is a major consideration, you better be heading over to the Sunshine State.

Flood Zone Type

The Federal Emergency Management Agency designates various locations according to flood risk. The four designations include:

  • Moderate to Low-Risk Areas
  • High-Risk Areas
  • High Risk- Coastal Areas
  • Undetermined Risk Areas

Companies that offer flood insurance use these designations to price their policies. Consequently, if your home is located in a high-risk area, flood insurance will be more expensive. If your home is in a moderated to low-risk area, your premiums won’t be as high as for property owners in a high-risk area.

Expect to pay the lowest premiums if your home is in an area with an undetermined level of risk. In these areas, insurance underwriters will typically look at other variables.

The History of Your Home

Has your home been ravaged by floods before?

If yes, your premiums will be higher. And if your house has no history of flooding, your premiums will be lower.

When your house has a history of flooding, it’s a clear sign that it’s in a high-risk area. Natural floods are rarely one-time events. They’ll show up again when the skies decide. As such, your insurance company will be taking up more risk by covering your house.

A mistake some homeowners whose properties have a history of flooding make is switching to another insurance company, hoping that the new insurer won’t bother about the property’s history. Even if they don’t ask you, they’ll still know, as long as you have previously filed a flood insurance compensation claim.

It’s advisable to stick to your insurer even after you’ve filed a claim. As an existing customer, you’re more likely to get a better deal.

The Structure of Your House

Is your home’s lowest floor above the ground? Does your home have a basement?

Underwriters will look at such features when evaluating risk. If your home’s lowest floor is above the ground, flood waters may not cause as much damage as they would if your house had a basement. As a result, you’ll get better rates.

The same applies if you have taken steps to flood-proof your house. Flood-proofing involves installing a sewage water backstop, reinforcing your doors, and erecting floodwalls.

If you’re thinking of building a house from scratch in a flood-prone area, elevating it will make a big difference when it comes to purchasing flood insurance. An elevated-house might not be severely affected when floods hit.

Amount of Coverage

An NFIP policy has a limit of $250,000 for the house and $100,000 for the contents of the house.

If you’re purchasing a policy that provides maximum coverage, you’ll obviously pay than a person who is purchasing half the coverage.

If you need more coverage, you’ll have to buy a policy that’s not backed by NFIP, in which case you can expect to pay much more.

Get Your Flood Insurance Policy

So, how much does flood insurance cost?

While flood insurance policies aren’t a one-size-fits-all, most homeowners who purchase this policy pay about $700 annually. However, we’ve fleshed out the various factors that can affect your premiums.

Get shopping! And keep reading our blog for more insurance tips and insights.