Are you wondering how much does flood insurance cost? If yes, you should check out our guide right here on the average prices.
The United States had 5,178,978 flood policies in force in 2018. Most of these policies are prevalent in flood-prone states. The flood insurance rates depend primarily on the flood risk, the coverage you need, and your home’s structure.
Unfortunately, many homeowners who ought to have flood insurance haven’t purchased one. High cost, particularly in flood-prone areas, is the main barrier. It is crucial to note that the price of being uninsured is often higher than investing in flood insurance.
Are you wondering how much does flood insurance cost? You’re in the right place. Check out this guide to know the average prices.
How Much Does Flood Insurance Cost by State?
In 2018, the National Flood Insurance Program (NFIP) coverage was at an average annual cost of $642. The cost of flood insurance varies from state to state. However, the flood zone level, home structure, and coverage type are the central determinants of the flood insurance cost.
It is crucial to note that the maximum coverage under NFIP policies is $250,000 for a home, while $100,000 is for the items in your home. While some people opt for private covers, NFIP is arguably the most popular flood insurance program in the U.S.
When outlining the rates of state flood rates, it is essential to categorize the most expensive and the least expensive. Note that these estimates can change based on several factors, such as low-risk areas. For better estimates of your state’s rates, consider using a flood insurance cost calculator.
States With High-Cost Flood Insurance
The most expensive states for the NFIP flood insurance are Vermont, Connecticut, Pennsylvania, Massachusetts, and Rhode Island. The cost of insurance for these states is $1,391.24, $1,394.83, $1,175.58, $1,251, and $1,389.22 respectively.
For states such as Rhode Island, Massachusetts, and Connecticut, the high cost of flood insurance isn’t surprising. These states are relatively small and in coastal areas, making most homes susceptible to floods compared to other states.
Conversely, the landlocked states such as Pennsylvania and Vermont are still part of the states with high insurance rates despite being seemingly less prone to floods. Considering that the sample size in these two states is smaller, the average costs might be high. However, when living in these states, you might pay a relatively lower rate than what’s indicated as average.
States With Low-Cost Flood Insurance
States such as Florida, Texas, Maryland, Louisiana, and Utah have lower flood insurance rates. The average cost of insurance for these states is $550.33, $581.11, $572.91, $664.43, and $653.78, respectively. If you know about the flooding rate in Texas and Florida, these low rates might seem surprising.
Expectedly, homes that are in less flood-prone areas have inexpensive flood insurance premiums. The low average for these rates emanates from the considerably low risk. In Texas and Florida, the risk is somehow spread out, making the average cost of flood insurance cheaper in these states regardless of being flood zones.
Despite your home being in an area where the risk is low, consider investing in a flood policy. You can consider Better Flood Insurance for the best coverage at friendly prices. You never know when a hurricane will strike!
Impact of Flood Zones on Insurance Cost
If you’re wondering how much does flood insurance cost depending on the flood risk, you need to know more about the three flood zones. Flood zones A, B, and C, determines the price you pay for your insurance.
Zone A refers to high-risk areas. These zones have 25% chances of flooding within a 30-year mortgage period. They also have a 1% risk of flooding each year.
Canarsie is one of the neighborhoods in New York where the average cost of flood insurance could jump from $600 to at least $3,000 by 2022. The region is a high-risk area. The flood insurance premiums might also be mandatory for everyone in the neighborhood.
Zone B refers to moderate to low-risk regions where the chances of flooding are less. Your mortgage lender might not require you to have flood insurance. In this zone, you can get the NFIP Preferred Risk Policy, which allows you to get a policy for as low as $200.
The undetermined flood zone is commonly referred to as Zone C. Flooding is improbable in these regions. However, that doesn’t mean that flooding is impossible, and it is wise to invest in flood insurance.
Flood insurance in undetermined areas can be pricey due to the underlying uncertainty. You might want to compare quotes from different insurers to know what premiums are within your budget.
How You Can Reduce the Cost of Flood Insurance
Flood insurance can have you breaking a bank, especially if you live in high-risk regions. Relocating is one of the best ways of addressing the high cost of flood insurance. Yet, this option isn’t always tenable for homeowners.
You can check your eligibility for Preferred Risk Policy, which provides coverage at a lower cost. This Standard Flood Insurance Policy applies to homes within zones B and C within NFIP communities. The maximum coverage in this situation is $250,000.
It would also be advisable to check the Community Rating System. You can get this discount based on the efforts your community takes to mitigate flooding. With the discount, you will pay considerably lower premiums.
You can further decide to increase your deductible as a way of reducing your flood insurance cost. With a high deductible, your premium will be low, which will also affect your claim payment. As such, you might have to make some out-of-pocket payments when a disaster strikes.
Are You Wondering How Much Does Flood Insurance Cost? You Are Not Alone
Most homeowners ponder over flood insurance rates. You should understand that your standard home policy doesn’t cover any flooding damage. You need a flood-specific cover, especially if you live in a flood-prone area.
So, how much does flood insurance cost? Well, it mostly depends on your state. Flood zone states have expensive insurance policies. It would be advisable to get quotes from different flood insurance providers to know the premiums within your budget.
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