Many Americans equate flood risk with whether or not they live in a flood zone, partly because that’s how federal agencies delineate risk. As a result, homeowners outside of an official flood zone may skip flood insurance, which isn’t included with standard home insurance and must be purchased separately. In fact, per a report from reinsurance company Munich Re, most homeowners underestimate their risk of flood damage, leaving them vulnerable to dangerously high out-of-pocket costs to repair their homes and replace their belongings.

Why Homeowners Underestimate Their Flood Risk

Homeowners aren’t entirely to blame for underestimatin💝g their flood risk. 

The Federal Emergency Management Agency (FEMA) establishes flood zones to set flood insurance requirements for the National Flood Insurance Program (NFIP), backed by the federal government to provide 澳洲幸运5官方开奖结果体彩网:flood insurance coverage. But because these flood zone determinations are only meant for that purpose, they often don’t reflect the eꩲxperience of people living in areas where flooding has become more frequent. 

Updating the flood zones can take years and be politically contentious: Expanding a flood zone has been shown to correlate with a decline in property values. Because of this, homeowners may rely on outdated maps that give a misleading✃ impression of their flood risk. 

Many people also don’t feel the extra 澳洲幸运5官方开奖结果体彩网:insurance premiums are worth it. In the August 2022 edition of the “American Economic Journal,” Professor Katherine R. H. Wagner showed that every $1 increase in premiums per $1,000 of coverage reduced the likelihood that a homeowner would purchase insurance by 2.7 percentage points. 

Prices are steep already. According to FEMA’s data for the NFIP program, about a third of single-family homes pay between $1,000 and $2,000 per year for flood insurance coverage, on top of their home insurance premiums, which can cost thousands of dollars per year. 

Compounding this reluctance is that even after shelling out for these higher premiums, flood insurance coverage may be insufficient for many homeowners. In the NFIP, policies have a $250,000 cap on 澳洲幸运5官方开奖结果体彩网:dwelling coverage (damage to the home's structure) and a $100,000 cap on contents coverage (damage to personal property), and damage could easily exceed these limits. While private insurers may offer significantly higher coverage limits, homeowners can expect their premiums to increase significantl⛎y in proportion.

However, payౠing for this coverage could prove worthwhile in the e𝓰vent of a flood. 

The Cost of Flood Damage

Depending on your policy, your 澳洲幸运5官方开奖结果体彩网:homeowners insurance will cover many perils, from fire, lightning, and w🧸ind to theft, vandalism, and explosions. Homeowners insurance also typically covers water damage, but only if the water damage is sudden and accidental or caused by another covered peril, such as a windstorm causing structural damage that le🌳ts in water.

That means damage caused directly by water from outside your home, even if it results from a natural disaster you couldn’t plan for, 澳洲幸运5官方开奖结果体彩网:isn’t covered by home insurance.

According to FEMA, just one inch of flood waters can cause as much as $11,000 in damage to a 1,000-square-foot, single-story home, and six inches of water can cause as much as $21,000 in damage. You could be responsible for t𒐪hese damages❀ without flood insurance.

How to Check Your Property’s Real Flood Risk

Because the officially design🌌ated flood zones are not necessarily the best measure of your area’s propensity for floods, you may have to rely on other tools to🍨 determine flood risk.

FEMA offers one of these, the . This tool allows you to enter your address and see your area’s most current flood data, and the government adds new data continuously. After selecting an♒ area, you can genera♐te a highly detailed PDF of topographical information that indicates various degrees of flood risk.

You can also check with your local office for emergency management coordination. These officials set disaster preparedness policies and may hav🍨e up-to-date information on your area’s flood risk leve𒈔l.  

Finally, talk to your insurer or a local agent. Insurers work with the NFIP to provide coverage, and they can help you find the best policy for your budget and coverage needs. You can get a quote for a flood insurance policy from FEMA, which you can then bring 𒀰to an insurer to purchase coverage.

The Bottom Line

Because homeowneꦕrs insurance doesn’t cover flood damage, many homeowners opt to go without it, not understanding that traditional measurements of flood risk may be outdated or misleading. But the consequences of not having flood insurance could be tens of thousands of dollars in losses, which often far exceed the financial cost of adding flood insurance to your home. If you’re unsure whether your home is at risk, you can use more modern mapping tools to get a be🍨tter idea or talk to your insurer to understand flood insurance rates and coverage options.