How Much is Flood Insurance in Alabama?
Flood Insurance Rates Alabama | Flood Insurance Alabama
Does my Alabama homeowner insurance cover flooding?
A typical Alabama homeowners’ policy is written through Farmers, State Farm, Allstate, and Progressive, for instance, excludes flooding as something that will be covered under their homeowner’s policy.
In most cases, the only way to get flood coverage is by purchasing a stand-alone flood insurance policy. However, you should ask your homeowners agent if you can add an endorsement to your homeowner’s policy to cover flooding. Yet, don’t be too surprised if the answer is NO.
Do I need flood insurance in Alabama?
It is important to have flood insurance coverage in Alabama because our beloved Cowboy State has seen a fair share of flooding, and more is likely coming.
Most homeowners think about Flood insurance in Alabama at some point, maybe before buying a home or during the closing process. Many of us only think about it when a big storm looms. Or we hear on the news that flooding is forecasted, or we see water too close to our home.
If your home or business is in a flood zone, that is considered a low flood risk area. Sadly, many homeowners decide to forgo purchasing coverage because they believe they are safe from flooding. Some real estate and insurance agents may even say you don’t need it.
I ask you to consider the facts: 20 percent of all flooding events across our nation come in areas that are considered low risk. After our last few major storms (Hurricane Harvey), we saw flooding in these low-risk areas. 80 percent of these individuals had water in their homes or building and didn’t have flood insurance coverage.
Alabama Flood Zone Map
In Harris county, nearly 135,000 homes were damaged. Three-fourths of these properties were considered low to moderate risk.
We often hear that people believe the government will help, which is true. However, a few things must align for you to get government assistance.
- The president of the United States must declare the flooding event a state of emergency. If this doesn’t happen, then there won’t be assistance.
- Homeowners get average assistance after a flood when they do not have flood coverage is $5,000. The average cost of damage to one’s property after a flood is $38,000+. That $5K you get from the government? It comes as a loan, and you will need to pay it back. Are you willing to gamble on your financial future by forgoing flood insurance coverage?
https://www.bloomberg.com/graphics/2017-fema-faulty-flood-maps/
Alabama Flood Map
One more note on these low-risk flood zone maps. Many of these maps are over 40 years old. If the area has been developed, there is likely more concrete, creating a barrier for land that previously might have absorbed the massive downpour.
Because of all these factors, it is difficult for property owners to know their true risk of flooding. FEMA admits that their flood maps only give an idea of part of the risk. Our recent storms are facts that it can rain anywhere within Alabama, and you should consider getting flood coverage so you are not uninsured when you need it most.
FEMA flood zone maps often take years to go into effect after the terrain was studied. This gives the impression that the area is “more up to date” than it is.
The average cost for Alabama flood insurance in these Low-risk areas is $595 per year.
FEMA’s National Flood Insurance Program (NFIP) and all federally backed lenders rely on these Alabama flood insurance maps to assess risk, set premiums, and determine who is required to purchase flood insurance. Bad information about an area’s flood risk can leave property owners under or uninsured.
How much is flood insurance in Alabama?
Alabama NFIP flood insurance.
There are many options available in Alabama regarding flood insurance, but they fall into two main categories. The Government Policy also called the NFIP or FEMA, and the Private flood insurance market.
The National Flood Insurance Program (NFIP), also known as FEMA, is the government option for flood insurance. The NFIP has enjoyed a 50-state monopoly on the flood insurance market.
Not “private flood insurance” but NFIP Resellers
Suppose you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any of the logos below. In that case, you are buying the NFIP flood policy that is just being resold through a government program. These companies are private companies, but their flood insurance is not. Here is a list of the 70 companies that resell the NFIP policy.
https://www.fema.gov/wyo_company
Alabama private flood insurance market
There are alternatives to NFIP or government insurance. It is called Private flood insurance, most notably Lloyds of London Flood insurance. However, there are other options available in Alabama. We shop all the options for your property in your region to ensure you are getting the best premium. Please click here if you are ready to have us do the work for you.
Our shopping includes the NFIP because sometimes we find that you can get a much better premium with government subsidies.
Flood insurance quote in Alabama
Lloyds of London Flood Insurance Alabama Market
Alabama is fortunate to have many Lloyds of London flood insurance options. Although many Lloyds flood insurance companies will have you assume that there is only one option, nothing could be further from the truth.
Lloyds of London has a rich history attributed to having invented the first modern insurance model. Unlike most of its competition, Lloyds of London is not a company but a corporate body. This structure works well since it has been around for over 330 years. Lloyds operates under multiple financial backers pooling their capital to spread the risk.
Alabama Flood Zone Map
I have two blog posts that deep dive into Lloyds of London and what they mean to Alabama’s flood insurance market. If you are interested, the links are below.
Lloyds of London Flood Insurance
Private Flood Insurance vs. FEMA
Lloyds also ensures world flood insurance, which covers flooding events in India, Australia, and much of Europe. The “game” of insurance is to spread your risk since Lloyds is worldwide.
My joke here is that Lloyds is banking on God’s promise that he won’t flood the entire world again, …..so they won’t have to pay out the whole world’s flood claim.
How much does flood insurance cost in Alabama?
Many factors go into getting the cost of flood insurance for Alabama. If your home is in what is considered the low-to-moderate risk, you can get a heavily subsidized policy through the government.
Alabama flood insurance low-to Moderate Risk rate and cost.
This is Flood Zone X, which is not lender required flood zone.
This is usually identified as an X-flood zone. Then we would suggest the government Preferred Risk Policy (PRP) which is a subsidized policy and has set flood insurance coverage limits (see the grid below):
NFIP Maximum Coverage Limits
Here is a link if you want to really dig into this one. Be ready for an eye chart because every option is a public record and should be standardized to accost whoever writes these policies.
