Flood Insurance Costs / Policy Rates

Flood insurance cost varies for different homeowners. In a Federally designated flood zone, FEMA and Congress require that the homeowner carry flood insurance. These flood plain designations are given to areas that are susceptible to flooding.

Flood insurance costs for these zones are set by FEMA, not by the individual insurers. While there are 100 or more private insurance companies offering flood insurance, the policy rates are exactly the same at each of those companies for a home in a federally designated flood zone.

The National Flood Insurance Program, or NFIP, manages the flood insurance costs.

Renters and Condo Owners

Standard renter’s insurance and condo owner’s insurance, just like standard homeowner coverage, does not cover flood insurance.

For renters or condo owners living in a Federally designated flood zone, purchase of flood insurance for renters may be quite affordable, since the federal government helps to subsidize the costs.

Since most major renter’s insurance companies handle insurance through the NFIP, you should be able to work with your current insurer to purchase coverage.  These rates are discounted for people in flood zones.

Varying Costs for Policies

Rates for flood insurance depend on many factors, such as date and type of construction, and the built in risk for flooding at the place where you rent or own a home.

So even though all NFIP flood insurance policy rates are determined by the Federal government, there are varying levels of flood insurance costs.

Costs Varies According to Risk

For homeowners in a moderate-to-low risk area are eligible for coverage at a preferred rate. Preferred Risk Policy premiums are the lowest types of premiums that are available through the NFIP and FEMA. The policies offer building and contents coverage for a combined price. Prices for building and contents coverage start at $148 per year for a residence worth $35,000 and personal contents worth $12,000 or less.

If your home doesn’t qualify for a Preferred Risk Policy, FEMA offers a standard and high risk policies for higher prices. For example, the standard rate for $35,000/$10,000 personal belongings is $434 annually, and the high risk rate for the same coverage is $509.

Still, these flood insurance costs are much less than a person would pay without government subsidies.

Contents Only Policies for Renters

Renters are able to buy contents only policies in federally designated flood zones. The homeowner must provide flood insurance, but they will likely opt for the building-only insurance available to them.

As an example, the flood insurance policy rates for standard coverage of $10,000 of contents only flood insurance coverage is $155 annually.

The building-only coverage for a $35,000 structure is $314 annually.

Flood Insurance Outside Federal Designation

Many homeowners wisely opt for flood insurance even though they live outside a federal flood zone. Renters, too, find they are not protected against losses that are relatively common.

For example, many people do not know that any water coming in from the outside is considered a flood, and is not covered under standard renters or homeowners insurance. While the flood insurance policy costs for additional coverage may be higher than in those areas with Federal subsidies, they may actually be more reasonable because of the lower risk.

When a flash flood or basement water does occur, the damages to personal property is often extensive. Flood insurance is the only way for you to protect yourself from losses in these situations.