Need flood insurance? The first thing to know is that it is not part of standard homeowners insurance coverage. You have to buy it separately. Most flood insurance policies are regulated by FEMA and provided through the National Flood Insurance Program (NFIP).
The majority of flood insurance policies are sold through insurance companies that take part in the NFIP. However, some private companies also sell non-NFIP flood insurance policies. There are pros and cons to NFIP flood insurance and private flood insurance.
In this article
What are NFIP flood insurance companies?
NFIP flood insurance companies provide flood coverage through the FEMA-backed NFIP. The NFIP works with over 50 insurance companies to provide flood coverage to around 23,000 communities.
While flood damage is not covered under home insurance, many homeowners insurance providers sell flood insurance. Below is a list of some of the major insurance providers who take part in the NFIP.
- American Family
- Auto Club
- The Hartford
- Liberty Mutual
If you already have an insurance company and want to see if yours provides NFIP flood insurance, take a look at FEMA's full list of companies.
Rates for flood insurance do not vary between NFIP providers, as the current rate is set by the federal government. There's no comparing costs when they're all the same. Quality of service and convenience are the two main factors to consider when you are looking for a flood insurance company.
If you already have home, auto or life insurance and are happy with their service, consider asking your agent if they provide NFIP coverage as well.
How much does NFIP flood insurance cost?
An NFIP flood insurance policy costs an average of $874 a year. There are many factors that affect your final rate, including:
- Your area's flood risk
- Coverage purchased
- Your deductible
- Construction and age of the house
- Elevation of your home's contents
If you purchased your home through a lender or live in a high-risk flood zone, you may be required to purchase flood insurance. Even if you don't need to buy it, it's worth considering. According to the NFIP, the average flood insurance claim it paid out was $52,000 in 2019. When you also consider that 40% of all flood claims are made in low- to medium-risk flood zones, flood insurance makes sound financial advice for many homeowners.
Private flood insurance companies
Flood insurance bought through private providers currently makes up a small amount of the overall policies purchased, but private flood insurance is becoming more popular. Below is a table showing the most commonly used private flood insurance companies, along with their market share of the U.S. flood insurance market as of 2022.
|Zurich Insurance Group||11.9%|
|Source: Insurance Information Institute|
How much does private flood insurance cost?
There is limited data on the average cost of a private flood insurance policy. Since flood risk is a factor in a private flood insurance rate, living in a low-risk zone could reduce your rate if you choose a private provider. For an accurate quote, we recommend contacting your insurance company first, then comparing it to other insurers that offer private flood insurance.
NFIP vs. private flood insurance
As mentioned, private flood insurance may be cheaper than NFIP. Another difference between private and NFIP flood insurance is the coverage limits available. NFIP flood insurance is limited to $250,000 of building coverage and $100,000 of contents coverage. Private flood insurance may have higher coverage limits, which some homeowners need.
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