How Much Is Flood Insurance?

November 30, 2023
A flooded home with homeowners wearing rubber boots

It's important for homeowners to understand the role insurance plays in helping to protect their most valuable assets. From losses arising from fire and theft to mitigating financial losses due to accidents, insurance can help offer a sense of security and peace of mind. However, there can be instances where standard homeowners insurance policies may not provide adequate coverage for a specific need, such as financial protection from losses caused by flooding.

Flood insurance is designed to help address this critical gap, helping to provide financial protection against the often-destructive consequences of flooding. Unfortunately, it's a common misconception that only homeowners residing in flood-prone areas need flood insurance. The truth is that floods can occur in unexpected places, catching homeowners off guard. And with increasingly unpredictable weather patterns, the frequency and severity of flooding events are on the rise. Recent data demonstrate that According to FEMA, 99% of counties across the United States have experienced some form of flooding.

The average cost of flood insurance across the U.S. can vary. Thankfully, with the right knowledge and guidance, homeowners can navigate the complexities of flood insurance and obtain coverage at a reasonable cost.

Acrisure's licensed insurance agents have expertise in flood insurance, allowing them to assist homeowners in making informed decisions. Here, we delve into the intricacies of flood insurance costs, explore the factors that influence these costs, and provide valuable tips to help homeowners secure the right flood insurance coverage.

Flood Insurance Coverage Options and Limitations

Flood insurance isn't a one-size-fits-all solution.  As with any type of insurance, flood insurance policies will have varying terms, conditions, exclusions and limitations (it is therefore important to carefully review your policy to make sure it is right for your specific needs).  In general, flood insurance coverage can be categorized as follows:

Dwelling Coverage

Dwelling coverage, the primary component of most flood insurance policies, covers the physical structure of the home against losses caused by flooding. This commonly includes the foundation, walls, floors, and other structural components. It can also cover damage to electrical and plumbing systems, as well as built-in appliances like water heaters and air conditioning units. Note that detached structures like separate garages or fences usually requires separate coverage.

Personal Property Coverage

In addition to protecting the structure, some flood insurance policies may offer coverage for personal belongings damaged by flooding. This can include furniture, electronics, clothing, appliances, and other items. It is important to note that coverage for certain high-value items, such as artwork or jewelry, may be limited under a standard flood insurance policy, necessitating additional policies be if obtained if required by an individual's specific circumstances.

Basement Coverage

Basements and areas below the lowest elevated floor present unique challenges for flood insurance coverage. Standard flood insurance policies may cover essential systems like electrical and plumbing, but they often exclude coverage for finished basements or non-essential items stored in those areas. It's crucial to understand the limitations specific to basement coverage to assess the need for additional endorsements or supplemental policies.

Factors Affecting Flood Insurance Cost

There are many factors that can affect flood insurance premiums, namely location and property-specific considerations. Understanding these factors can help homeowners more accurately estimate and plan for flood insurance costs so they can make more informed decisions regarding their coverage.

Location-Based Factors

The geographical location of a property is one of the primary factors influencing flood insurance costs. The two most-critical location-based considerations are:

Flood Zone Designation 

FEMA (Federal Emergency Management Agency) assigns flood zones based on the likelihood of flooding in specific areas. Properties located in high-risk flood zones generally incur higher insurance costs due to their increased exposure to flood risks. In contrast, properties in low-to-moderate risk zones typically pay less in premiums.

Proximity to Bodies of Water

It may go without saying, but homes located near rivers, coastlines, or other bodies of water are typically at risk from flooding. The proximity to these water sources can increase the likelihood and severity of flood-related damages, potentially leading to higher insurance costs.

State of Residence

Different states have varying average costs for flood insurance policies. This is due to several factors, including whether the state has areas of high flood risk, if it has historically experienced major flooding events, how robust the state's floodplain management practices are (including building codes and flood mitigation measures), and what state-specific regulations or policies may be present.

Property-Specific Factors

The characteristics of the property itself can also play a significant role in determining flood insurance costs. Key property-specific factors include but are not limited to:


The elevation of the property relative to the Base Flood Elevation (BFE) is an important consideration. Water flows downhill and seeps into soil, and as such, homes located above the BFE are generally deemed less prone to flooding, resulting in lower insurance premiums. Conversely, properties below the BFE face higher risks and may require additional coverage or endorsements to help protect against flood-related financial loss.

Construction Materials and Design

The materials used in a home's construction can impact its vulnerability to flood damage. Homes built with flood-resistant materials and design features, such as elevated electrical systems and flood vents, may qualify for lower insurance premiums. Of course, this also means that properties with susceptible building materials or inadequate flood mitigation measures may face higher costs. This can become an issue when trying to obtain insurance on older structures that may not have been built with flooding in mind.

It's important to note that, depending upon a home's unique characteristics and property-specific factors, specific policies and additional coverages may need to be explored. Understanding a flood insurance policy's terms, conditions, limits and exclusions is crucial to ensure that a homeowner has adequate protection against flood-related losses.

Tips for Making Flood Insurance More Affordable

Securing affordable flood insurance coverage is important for homeowners looking to protect their properties without straining their budgets. While flood insurance costs are influenced by a number of factors, there are certain steps that can be taken to potentially help reduce premiums (consider discussing these factors with your insurer prior to purchasing a policy):

Help Mitigate Flood Risks through Property Improvements

Investing in property improvements aimed at reducing flood risks can sometimes lead to lower insurance premiums. For example, consider raising certain aspects of the home's elevation above the Base Flood Elevation (BFE) to help reduce flood risk. Elevate electrical systems, HVAC units, and other critical components to demonstrate a commitment to mitigating potential damages. A homeowner may be able to save on premium costs for every foot the structure is raised above the BFE.

Additionally, ensuring that the property has effective drainage systems, including proper grading, gutters, and downspouts, to redirect water away from the foundation may also help reduce premium costs.

Understand and Comply with Local Building Codes

Insurers may offer lower premiums for properties that meet or exceed local building code requirements, so it can be useful to be informed about local building codes and regulations related to flood mitigation. Adhering to these codes and regulations during construction or renovations can demonstrate compliance with recommended flood mitigation measures and therefore may result in lower premiums.

Consider Flood Zone Designations

Explore the flood zone designation of the property and consult FEMA's Flood Insurance Rate Maps (FIRMs). If the property is on the edge of a high-risk flood zone, elevating the structure or implementing flood mitigation measures could potentially move it into a lower-risk zone, possibly resulting in reduced premium amounts.

Compare Quotes from Different Insurers

Request quotes from multiple providers and compare their coverage options, deductibles, and rates. Working with an experienced insurance broker like Acrisure that specializes in flood insurance can help a homeowner navigate the market and find the right policy.

Balance the Deductible against the Annual Premium

Choosing a higher deductible can lower the annual premium amount but may result in paying more out of pocket when covered events occur. Assessing financial capabilities can help determine if increasing the deductible is a reasonable consideration for helping to reduce premium amounts.

Leverage Community Discounts

Check if the community participates in the National Flood Insurance Program's Community Rating System (CRS). Communities that implement flood mitigation measures and engage in floodplain management may be eligible for discounted flood insurance rates.

Remember: Although reducing the costs of flood insurance can be advantageous for many reasons, it's important to make sure you obtain the right coverage for your property's specific needs. Evaluate the property's specific flood risks to help ensure that the home has adequate insurance coverage in place.

FAQ: Frequently Asked Questions about Flood Insurance Costs

What is the replacement cost value in flood insurance?

Replacement cost value (RCV) refers to the amount it would take to repair or replace damaged property with materials of similar quality and functionality. With respect to flood insurance, RCV may used to determine the coverage amount for a claim regarding damages to the structure and personal property. It is important to understand the RCV coverage limits specified in the policy to help ensure adequate protection against flood-related damages.

However, some policies may offer actual cost value (ACV) coverage instead of RCV. ACV refers to the amount the insurance company will pay to repair or replace damaged property based on its actual cost at the time of the loss, taking into account such factors as depreciation. Again, it is important to carefully review your policy, including the coverages and limits specified therein, to help ensure you have the right insurance in place to fit your specific needs.

Are flood insurance costs the same across all flood zones?

Flood insurance costs can vary across different flood zones. High-risk flood zones, such as Special Flood Hazard Areas (SFHAs), often have higher insurance premiums due to their elevated exposure to flood risks. On the other hand, low-to-moderate risk zones may have comparatively lower insurance costs.

Does flood insurance cover all types of flood-related damages?

Flood insurance policies have specific coverage terms, conditions limitations and exclusions. While standard flood insurance policies typically cover structural damages to the dwelling, as well as damages to essential systems, they may not cover damage to certain personal property, other types of items within the home or non-essential structures, such as detached garages, greenhouses, or fences.

Acrisure Can Help You Navigate the Waters of Flood Insurance

Many different factors are used to determine a flood insurance policy's premium and navigating those complexities can be challenging. However, Acrisure is available to connect you with flood insurance solutions customized to meet your needs. Contact Acrisure today or request a flood insurance quote now!

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