How Much Does a Flood Insurance Cost?

The Judeo-Christian narrative tells the story of God destroying humanity with a great flood. Although many people in the United States can appreciate the precautionary tale, there are still a lot of Americans literally experiencing it firsthand. According to The Pew Charitable Trust, flooding is the costliest and most common natural disasters in the country. The overall financial burden of flood between the years 1980 and 2013 has tallied up to $260 billion.

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Based on the data presented by the National Oceanic and Atmospheric Administration (NOAA), Texas has the highest flood frequency in the country. From 1996 to 2017, the number of flooding reports has reached up to 11,648. The most recent that struck Texas came in the wake of the hurricane Harvey – a storm that is projected to cause around $100 billion of damages.

Just like in the Judeo-Christian account, preparation has enabled the model household (Noah) to keep their lives and property intact during the world-ending deluge. Regardless of one’s theological or philosophical standpoint, every person has the right to do the same.

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Average Cost of Flood Insurance

There is little one can do to stop the flood from wrecking one’s home as a hurricane passes by. However, material things lost or smashed during the deluge can be replaced with enough funds. Flood insurance allows a household to claim financial support from policy providers in an effort to put things back together. Just like any type of insurance, the flood insurance is an important investment for every family facing the potential risk of weather-related catastrophe.

The average national flood insurance premium pricing is anywhere around $660 to $800 per year. But for those who wish to estimate flood insurance rates more precisely, one can refer to this 2017 matrix:

What are Included

The people in the United States pay for a flood insurance policy in the understanding that their claims will cover all the damages. However, it is important to know that an average policy also has limits which are relatively subject to the value of the premiums paid periodically.

One should always remember that insurance policies under the government-issued National Flood Insurance Program (NFIP) will not take effect if it was purchased within 30 days – even if the storm hits and swamps one’s home within this timeframe. Yet it is, therefore, very important to acquire this investment as soon as one earns the title of the residence.

There are two types of financial damages for which the insurance policies can establish a coverage limit. For the damages of home structure, most companies can cover roughly up to $250,000. For the loss or damage of personal property, the coverage limit is up to $100,000. It is important for prospective homeowners to understand that most companies would sell these two policies separately. One can choose from either of the options or simply buy both. These are the usual reimbursement inclusions for each these two types of damages:

Home Structure Reimbursement:

  • Building and foundations
  • Electrical and plumbing system
  • Centralized HVAC system
  • Kitchen appliances
  • Permanently installed carpeting and flooring
  • Permanently installed wallboards, cabinets, and bookcases
  • Window blinds and shutters
  • Detached garage/s (limited to 10% of the policy)
  • Debris removal

Personal Property Reimbursement:

  • Clothing, electronics, and furniture
  • Curtains and window accessories
  • Portable air condition unit
  • Kitchen appliances
  • Clothes washers and dryers
  • Food freezers and its grocery items
  • Valuables like artwork, rugs, and jewelry (up to $2,500)

Additional Costs

One of the keenest ways for someone to know how to estimate flood insurance rates is to know what it takes to protect his/her home from being swamped. Considering the usual restrictions in the amount of financial coverage, it does not seem very wise to rely on insurance as the sole means of security. In fact, flood insurance only supplements the overall flood security preparedness.

Reducing the cost in terms of structural and personal property damages practically reduces the monthly or annual premiums. In terms of additional investment for overall material security, these are the two major areas one can focus on:

Protecting the House:

  • Home inspection$512 per hour (structural engineer)
  • Utility renovation$50 to $100 per hour (electricians) and $45 to $150 per hour (plumber)
  • Relocation of heavy itemsaround $200 per 2 hours (movers)
  • Elevating the house foundationaround $2,601 to $7,833
  • Sewer backflow valve installationaround $375 to $525

Protecting the Basement:

  • Basement inspection$512 per hour (structural engineer)
  • Sump pump installationaround $1,147
  • Interior drainage installationaround $700 to $2,600
  • Basement waterproofing: around $8,700 to $14,500
  • Landscape gradingaround $900 to $4,600

Shopping for Flood Insurance

The NFIP may be the authority behind the baseline flood insurance standards, but it is not the only source available for consumers in the United States. One can purchase policies from some providers that offer a shorter 14-day waiting period. Private companies tend to have certain advantages over the government programs. When it comes to choosing a flood insurance company, consumers should take a closer eye on the following criteria:

  • Simplicity of the process
  • Expediency and proficiency in handling claims
  • Ease of connecting with the agent for claims
  • Amount of damages covered
  • Expediency of the provider’s payment

As of 2017, there are around 10 highly reliable companies in the United States. These are the following names recommended online:

  • Amica Insurance
  • USAA Property & Casualty
  • Erie Insurance Group
  • MetLife
  • Auto-Owners Insurance Group of Companies
  • Nationwide Mutual Insurance Company
  • Hartford Financial Services Group
  • Liberty Mutual
  • Travelers
  • Farmers Insurance

Factors Affecting Flood Insurance Cost

Anyone who can estimate flood insurance rates could do a lot better if he or she knows what drives these rates in the first place. 

  • Age of Property

The structural integrity of the house is relative to its age. Hence, providers tend to charge higher premium rates for homeowners living in houses that are due for renovation.

  • Building Materials

Apart from the house’s sturdiness, insurance providers are also keen about the overall value of the residence in terms of its materials. In case of structural damages, it is cheaper to replace durable vinyl siding than hardwood.

  • Number of Floors

Every homeowner must have at least one upper floor for their house. As mentioned earlier, the elevation of items and equipment is crucial for reducing premium since providers can assess the practical advantage of an elevated deck.

  • Interior Placement of Belongings

In relation to the number of floors, insurance providers are also keen on knowing the financial cost needed to cover for loss or damages of belongings and equipment. Relative to the risk of flooding, placement of valuables and utility systems away from the potential flood level poses a positive security assessment – roughly translated into a marginal decrease in terms premium rates.

  • Coverage Deductibles

A shrewd investor would also consider how much deductibles they are will to shell out. As it happens, stating a larger potential out-of-pocket spending at the event of the flood immediately reflects a smaller monthly or annual premium rate.

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