Flood Insurance Cost Calculator

A question we often get asked is how much is flood insurance?

It can be hard to calculate the cost of flood insurance.

Because to some degree, it depends on where the structure is located. The government policy, which is written by the National Flood Insurance Program (NFIP) has a policy that is heavily subsidized and can be as little as $500 a year in most areas.

Flood Insurance Caluculator

“THE BEST WAY TO REALLY KNOW THE COST OF
FLOOD INSURANCE IS TO AS THE FLOOD NERDS
TO SHOP YOUR FLOOD INSURANCE FOR YOU”

This type of policy is written on a Prefered Rate Policy, and below is a table to show you the varying amount of coverage. Because the cost is so low, there is little that an agent can do with the coverages because they are locked.

If you are looking for a decent policy for flood insurance and aren’t required to have flood insurance by your lender, you are on to the right decision. In fact, our strong recommendation for you would be to get some kind of flood insurance coverage in place. Because anywhere it rains it can flood and the majority of flooding we have seen in recent storms have been in these low-risk flood area. Sadly 90% of all those poor property owners that flooded due to the hurricane that sat over Houston (Hurricane Harvey 8.17.17) were in what was considered “low-risk” flood zone.  And the average damage from one inch of water in your home is $50,000.  I would imagine that most of us could come up with $500 to save our home.

Yes please shop for my flood insurance

What is a Flood Insurance rate map?

This is a term that was coined by FEMA over their 50-year monopoly as they held captive the flood insurance market.

Basically, there are two categories per our government’s logic. Low to moderate-risk flood zones and high-risk flood zones.
Each group was assigned a flood zone rate map, and in turn, this is how the government’s policy rates are calculated. They calculate your flood policy on the flood zone your structure is in rather than the actual risk.

What is an Elevation Certificate?

Since the government was doing a one size fits all flood insurance calculation. And depending on the flood zone, they realized that there are more unique details that they would need about a property and they came up with the Elevation Certificate.

This is a government form that is filled out by a surveyor that visits your property. And measures elevations to fill out the approved government form.

Elevation Certificate can be excellent tools, but only the government uses them to rate.

We have two issues with the elevation certificates, though.

First, more than 80% of the time the surveyor fill out the form incorrectly. Secondly, the homeowner will end up paying $600+ to get the paper filled out. The NFIP is the only flood insurance that uses this to calculate the flood insurance.  This is not to say that you should not get one if you can.

If your lender is requiring you to get flood insurance. We suggest that ask the seller to provide you with an elevation certificate or at the very least give you cash to get one. Talk to your flood nerd to get advice on whether or not you will need one, but if you can negotiate more money off the sale price, please use this tactic.

“YOU WILL KNOW IF YOU ARE IN A HIGH-RISK FLOOD ZONE
BECAUSE YOUR LENDER WILL REQUIRE FLOOD INSURANCE”

What is base flood elevation, and how does it affect the cost of flood insurance?

How to get flood insurance at a low cost.

There are mostly two markets to buy flood insurance, the government, and the private flood insurance market (usually Lloyds of London flood insurance)

Yes please shop for my flood insurance

What is the NFIP?

The NFIP or (National Flood Insurance Program) administered by FEMA or (Federal Emergency Management Agency), to keep it simple we will just call this “the government policy.”

Our Government policy needs a quick history lesson. Back in 1968, congress needed to respond to the lack of availability of flood insurance since flooding is the most common and most destructive natural devastation we face in the United States. Every single state has experienced flooding within the last five years, and ninety percent of all-natural disasters involve flooding. Anytime there is a wildfire, tornado or earthquake there is flooding.

So this is a dangerous thing. In the late ’60s, the risk of flooding was considered an uninsurable risk. Coverage was almost nonresistant since most of the North American insurance companies didn’t have the capital to cover a catastrophic event. And quite honestly flooding scared the underwriters. So they simply would not offer it and in fact, exclude flooding as something that they will cover in their standard homeowner’s insurance policies.

The National Flood Insurance Program (NFIP) is a federal program.
It became official in 1973, and it has three components.
• To provide flood insurance, to improve floodplain management. • To develop maps of flood hazardous flood zones also called high-risk flood zone or Special hazard flood areas.
• To oversee flood mitigation efforts. They put into place all kinds of complicated rules, for participating or none participating communities, and they intended to provide insurance as an alternative to disaster assistance.

Somewhere over the NFIP’s 50-year monopoly on flood insurance in the united states, they lost its way. Half of those who have the NFIP policy are being overcharged. The remainder of then NFIP policyholder is getting massive subsidized premiums that don’t reflect the real risk.

Also, flood maps are being redrawn, so developments can be built in areas that are prone to flood. And unfortunately, property owners don’t really know their actual risk of flooding. So the disaster relief is still taking a hit. Not to mention that the program has been mismanaged for many years.

Yes please shop for my flood insurance

What is private market flood insurance?

In 2012 congress had to address two other issues with flood insurance. People were losing their homes due to unaffordable flood insurance even though they have never had water get in their homes. And the program was thirty billion dollars in debt.

Our representatives in Washington allowed competition to come into the flood insurance market. This is where the term “Private Flood” was coined.

By the Private flood insurance using new innovative technology, they are able to rate risk more accurately.

However, taxpayers are still on the hook because the government still giving heavily subsidies some properties. Especially the ones considered “low to moderate risk” even if they are on a ber island.

But for many in the high-risk flood zones, the private flood market can drastically reduce the cost of flood insurance. I have three articles that speak about the private market if you want to do a deeper dive.

https://www.betterflood.com/blog/lloyds-of-london-flood-insurance/

https://www.betterflood.com/private-flood-insurance/

https://www.betterflood.com/blog/nfipvsprivate/

The states that can benefit the most from getting a private flood insurance policy.
The most expensive flood insurance premiums with the government policy are in the New England, area. Connecticut, Vermont, Rhode Island, and Massachusetts are the most costly for the NFIP.

It is hard to believe that Florida, Texas, and Louisiana are the most affordable states for government policy. These are the state that really sees the most flooding, and these are also the state that is seeing the highest government-subsidized premium.

Should I get flood coverage?

It is widely accepted, and many property owners have homeowners insurance or hazard insurance (for commercial properties) to cover unforeseen disasters and events. Fire, someone how might get hurt on your property. Nationwide, about ninety-one percent of owner-occupied homes have a homeowner’s policy, although only seven percent of homers that should get flood coverage – purchase it.

Buying an insurance policy is really a way to protect your financial future. Many of us buy an auto, life, and home insurance. With flooding being the number one natural disaster in the united states, you would be wise to consider getting coverage seriously.

Floods do happen anywhere it rains. If you are within a mile of any water path even if it is currently dry will fill rapidly with water and flood your property. Look at how much coast and how many rivers we have in the USA.

Plus, our recent storms and changing weather patterns you don’t want to get caught without coverage when you really need it. Or filled with regret as your dreams and financial future are literally being washed away by floodwaters.

Yes please shop for my flood insurance

How is the flood insurance rate calculated?

There are several factors to consider when calculating your flood insurance premium. These include: The amount of coverage that you are purchasing $50,000 – $250,000 for residential or $100,000 – $500,000 for commercial buildings. RCBAP and condo policy are different. Check out this link for your Condo flood insurance coverage if you are interested in more information.

https://www.betterflood.com/blog/rcbap-master-flood-policy-unit-flood-policy/

Other considerations with how to calculate flood insurance are, the buildings location and flood zone, the design of the structure, the age of the structure, is it elevated or if the foundation is subgrade. And then homes in high-risk areas will have a different flood insurance cost calculation. These are usually identified with an AE or VE flood zone, and if you have a loan, your lender will require you to purchase a flood insurance policy. Most of the NFIP bases their flood insurance cost calculator on the foundation depth in relations to the Base flood elevation. Anything -4 will pay a higher premium. Oh, and elevation certificate can help or hurt with the calculation of flood insurance rates.

The private market uses an entirely different flood insurance cost calculator; they base it off of their high tech system. They have an advanced mapping with satellites and aircraft LADAR technically. They have the most accurate digital land surveys available. They also use heavy-hitting risk modeling to calculate out every imaginable scenario to gauge the probability of a structure having a flood loss.  Better information helps them get to the real cost of flood insurance. This frequently will save millions of property owners money.