Does my Massachusetts homeowner insurance cover flooding?
A typical Massachusetts 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 Massachusetts?
It is important to have flood insurance coverage in Massachusetts because our beloved Cowboy State has seen a fair share of flooding, and more is likely coming.
We believe that most homeowners think about Flood insurance in Massachusetts at some point, maybe before buying a home or during the closing process. However, many of us only think about it when a big storm looms, or we have heard on the news that there is flooding forecasted or happening too close to our home.
If your home or business is in a flood zone, that is considered 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. In 80 percent of these individuals had water in their homes or building and didn’t have flood insurance coverage.
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 that the government will help, which is true. However, a few things must align for you to get government assistance.
1 – 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.
2 – Homeowners’ average amount of 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 in the form of a loan, and you will need to pay it back. Are you willing to gamble on your financial future by forgoing flood insurance coverage?
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 Massachusetts, 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 is studied. This gives the impression that the area is “more up to date” than it is.
The average cost for Massachusetts 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 Massachusetts 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 Massachusetts?
Massachusetts NFIP flood insurance.
Many options in Massachusetts regarding flood insurance are available, but they fall into two main categories. The Government Policy is also referred to as the NFIP, 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 above. 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.
Massachusetts private flood insurance market
There are alternatives to the NFIP or government insurance. It is called Private flood insurance, most notably Lloyd’s of London Flood insurance. However, there are other options available in Massachusetts. 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.
Lloyd’s of London Flood Insurance Massachusetts Market
Massachusetts is fortunate to have many Lloyd’s of London flood insurance options. Although many Lloyd’s flood insurance companies will have you assume that there is only one option, nothing could be further from the truth.
Lloyd’s 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.
I have two blog posts that deep dive into Lloyds of London and what they mean to Massachusetts’s flood insurance market. If you are interested, the links are below.
Lloyds also insures the world with flood insurance, meaning they cover 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 worlds flood claim.
How much does flood insurance cost in Massachusetts?
Many factors go into getting the cost of flood insurance for Massachusetts. If your home is in what is considered a low-to-moderate risk, you can get a heavily subsidized policy through the government.
Massachusetts 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):
Here is a link if you want to dig into this one. Be ready for an eye chart because every option is public record and should be standardized to accost whoever writes these policies.
The average cost for flood insurance in Massachusetts with the maximum set limits in these Low-risk flood zone areas is $405 – $700 per year.
Your property is in a higher-risk flood zone, usually identified with a Flood Zone AE. Your lender will require you to have flood insurance. The cost of flood insurance in Massachusetts depends on many factors unique to the structure. We will try to give you an idea of the most common homes we see in Massachusetts with a basement foundation.
We will look at the Massachusetts cost of flood insurance for the NFIP maximum of $250,000 for the (building only) with NO CONTENTS and our recommended deductible of $5,000.
We will be rating this example on the NFIP and on a few of our private flood insurance policies, specifically Lloyds flood insurance options in Massachusetts.
Cost of Flood Insurance in MASSACHUSETTS in high-risk flood zone AE
Our example is in Boston, but the premiums will be the same in Revere, Quincy, Falmouth, Provincetown, and many other Massachusetts floods.
In our example, the Base Flood Elevation (BFE is 10.0) and is a home that is built before 1973
NFIP option in Massachusetts Flood Zone AE
NFIP – Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible
NFIP Annual premium in High-Risk flood zone is $5,262.00
This option is what we see if the property has had a flood loss before and either doesn’t have an Elevation Certificate applied or the Elevation certificate showing that the lowest floor is 4 feet under the BFE for the area. You can use 10% of your coverage to cover other structures on your property.
Massachusetts Private flood insurance – Lloyd’s of London Flood Insurance (option 1)
Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible
Lloyd’s of London (option 1) Annual premium in a High-Risk flood zone is $904.28
This option is great, and we are very happy when we can get this option. They can be a bit choosey about what risk they will accept and will not take anything that has had a flood loss. They offer basements coverage, about $2,000 for loss of use, and $2,000 for other structures, but they can’t increase this coverage. They do not require an Elevation Certificate to rate.
Massachusetts Private flood insurance – Lloyd’s of London Flood Insurance (option 2)
Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible
Lloyd’s of London (option 2) Annual premium in High-Risk flood zone is $876.01
This option is great, and we are very happy when we can get this option for our clients. They seem to be writing almost all risks; however, they do not write any property in a designated floodway or has a depth of -4 under the BFE. In our example, with our BFE being 10.0 ft, they will not accept this risk if the lowest floor is 7.0 ft. They will not take anything that has had a flood loss. They do offer limited coverage for basements and do not require an Elevation Certificate to rate and as a percentage of coverage for loss of use. If you want coverage for other structures, that will need to be added.
Private Flood insurance option (option 3) NOT LLOYD’S
Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible
The annual premium in a High-Risk flood zone is $4,736.00
This option will take properties that have had one flood loss for more than five years, and the payout was under $100,000 on the claim. Their coverage matches the NFIP. They will write practically all risks, don’t need an elevation certificate to rate, and are a bit lower in premium than the NFIP.
Private Flood Insurance – Lloyd’s of London (option 4)
This option must be written on the building’s Replacement Cost Value (RCV). Otherwise, there is a co-insurance penalty that kicks in. So, $250,000 might be a bit low in California, but to keep this going, let’s just use that for this option
Coverage of $250,000 (RCV) building coverage, No Contents, and $5,000 deductible
The annual premium in a High-Risk flood zone is $958.16 (a great price).
This options rating system is all over the board. Sometimes we get a crazy great price, but other times the premium is way higher than the NFIP will consider taking a property that has had one flood loss before as long as it has been more than ten years and the payout was under $50,000 on the claim. Their preferred coverage is at replacement cost, slightly different from some of our other Lloyd’s flood options. We usually reserve this one if the property doesn’t fit the above options. We can adjust coverages to control premiums. As mentioned before, these underwriters’ rates are all over the board. It is worth shopping through to ensure we are getting you the best premium possible. They don’t need an elevation certificate to rate.
Private Flood Insurance – Lloyd’s of London (option 5)
Coverage of $250,000 (RCV) building coverage, No Contents, and $5,000 deductible.
The annual premium in a High-Risk flood zone is $1,015.88
This option came from the company that used to run the NFIP program, so the coverage matches the NFIP coverage with two differences. They offer living expenses covering your cost when you are displaced from your home during repairs (most Lloyds flood policies offer this). They also offer a unique swimming pool clean-out, so if you have a pool, ask for this coverage.
Private Flood Insurance – Lloyd’s of London (option 6)
Coverage of $250,000 (RCV) building coverage. No Contents and $5,000 deductible.
The annual premium in a High-Risk flood zone is $904.05
This options rating system is also all over the board. Sometimes we get a crazy low price; other times, the premium is way higher than the NFIP. They will consider taking a property that has had one flood loss before as long as it has been more than ten years and the payout was under $25,000 on the claim. They have been rumored to give a low price the first year and then non-renew following years, or sometimes they jack the price way up so that we will watch them. They have a slick system, and their underwriting is managed by a 3rd party, which also sometimes seems to be a glitch.
More options are coming online every day, and we are working to be looking into every viable option.
Currently, Massachusetts has 61,711 NFIP policies in force to date, with a total cost of $77,215,928. That would make the average flood rate for Massachusetts $1,251. Of course, some will pay more, and some will pay less.
Hello, Massachusetts! Thanks for visiting our page for all your flood insurance needs.
Let’s start with Barnstable, Massachusetts, where the average flood rate is higher than the state average at $1,355. The active flood policies number 1,106 with $1,498,161 in written premium.
Next up is Bourne, Massachusetts, where the premiums add up to $1,925,330. The average flood rate in Bourne is $2,125, including 906 active flood policies. Give us a call, Bourne!
Let’s check out Brewster and Chatham, Massachusetts, where the active flood policies number 600 with $653,185 in flood premium. The average flood rate in these areas is $1,089.
Dennis, Massachusetts, has an average flood rate of $1,020. The premiums here total $1,379,063 with 1,352 flood policies in effect.
We’ll look at Eastham and Harwich, Massachusetts, where the flood policies number 937 with $918,126 in premium. The average flood rate for Eastham and Harwich is $980.
Two thousand one hundred ninety-four flood policies are active in Falmouth, Massachusetts. The average flood rate in Falmouth is $1,940, including $4,256,161 in written premiums.
Let’s look at a few areas, including Mashpee and Orleans, Massachusetts, where the premiums add up to $864,990. The flood policies here, number 824 allow the average flood rate to be $1,050.
In Provincetown, Massachusetts, the flood policies number 1,158 with $1,437,260 in flood premiums. Provincetown has an average flood rate of $1,241.
We’ll glance at a group that includes Sandwich, Truro, and Wellfleet, Massachusetts, where the average flood rate is $1,500. The premiums for these areas add up to $1,452,112, with 968 flood policies in effect.
$1,447 is the average flood rate for Yarmouth, Massachusetts. The active flood policies total 1,318 with $1,907,466 in total premiums.
Now we’ll look at a larger group of areas that contain Pittsfield, Attleboro, Freetown, New Bedford, North Attleborough, Taunton, Westport, Tisbury, Amesbury, and Andover, Massachusetts. These areas have flood premiums that total $3,192,819 with 2,748 active flood policies. The average flood rate calculates to be $1,162.
Our next large group includes Dartmouth, Fairhaven, Somerset, Swansea, Edgartown, Oak Bluffs, Beverly, and Danvers, Massachusetts, where the average flood rate is higher than our previous group at $1,473. The active flood policies number 2,931 with $4,316,393 in flood premiums.
Gloucester, Massachusetts, has 737 flood policies active with $1,194,677 in flood premiums. The average flood rate in Gloucester is $1,621. Give us a call! We’ll check the rates for you!
The average flood rate rises to $1,784 in Haverhill, Ipswich, and Lawrence, Massachusetts. The premiums add up to $1,523,397 with 854 flood policies in effect.
Eight hundred sixty flood policies are active in Lynn, Massachusetts. The premiums in Lynn total $667,769, which allows the average flood rate to be $776.
Let’s check out a group of areas, including Manchester-By-The-Sea, Marblehead, Newburyport, North Andover, and Salem, Massachusetts, where the average flood rate computes to $1,144. The flood premiums for these areas total $2,089,382, with 1,827 flood policies in effect.
Our next group contains Methuen, Nahant, Newbury, Peabody, and Rockport, Massachusetts, where the active flood policies number 1,650 with $2,205,945 in written premiums. The average flood rate for these areas is $1,337.
In Salisbury, Massachusetts, the premiums total $1,148,495. The average flood rate for Salisbury is $1,107, which includes 1,129 flood policies in effect.
Another collection of places includes Saugus, Westfield, Arlington, Chelmsford, and Concord, Massachusetts, where active flood policies number 1,764 with $1,732,024 in flood premiums. The average flood rate for these areas is $982.
When we look at Swampscott, Agawam, Bedford, Billerica, Cambridge, Framingham, and Lexington, Massachusetts, the average flood rate is just a little lower at $904. The flood premiums add up to $2,085,621 with 2,308 flood policies in effect.
$795 is the average flood rate in Lowell, Massachusetts. The premiums here total $921,724 with 1,160 active flood policies.
Next up are Malden, Melrose, Tyngsborough, Waltham, and Winchester, Massachusetts, where the active flood policies number 1,063. The flood premiums for these areas add up to $1,250,073, allowing the average flood rate to be $1,176.
In Newton and Tewksbury, Massachusetts, the average flood rate is a little higher at $1,277. The flood policies here total 559 with $713,586 in total premiums.
Nantucket, Massachusetts, has 1,066 flood policies in effect. The average flood rate here is a little higher at $1,726, including $1,736,228 in written premiums. Give us a call, Nantucket!
Braintree, Brookline, Cohasset, and Dedham, Massachusetts, combined, have $839,102 in written premium with 730 active flood policies. The average for these areas is $1,149.
Check out Medway, Milton, and Needham, Massachusetts, where the average flood rate is $719. The active flood policies number 350 with $251,770 in premiums.
Three thousand seven hundred ninety-four flood policies are active in Quincy, Massachusetts. The premiums here total $3,996,373, which allows the average flood rate to be $1,053.
The average flood rate in Wellesley and Weymouth, Massachusetts, is $629. The active flood policies number 688 with $432,410 in written premium.
The average flood rate jumps to $1,720 when we look at Brockton, Duxbury, and Hingham, Massachusetts. The premiums for these areas add up to $1,405,550, with 817 flood policies in effect. Give us a call! We’ll check your rates!
Hull, Massachusetts, has $3,231,328 in flood premiums with 1,990 active flood policies. The average flood rate in Hull is $1,624.
The average flood rate is $1,959 in Marion and Mattapoisett, Massachusetts. The premiums for these areas total $2,150,487, with 1,098 flood policies in effect.
In Marshfield, Massachusetts, the active flood policies number 1,725 with $2,058,187 in written premium. Marshfield has an average flood rate of $1,193.
Check out Plymouth and Chelsea, Massachusetts, where the average flood rate rises to $1,435. The premiums here total $920,958, with 642 flood policies in effect.
The premiums in Scituate add up to $2,167,687 with 1,563 active flood policies. The average flood rate for Scituate, Massachusetts, is $1,387.
The active flood policies in Wareham, Massachusetts, total 1,590. The average flood rate in Wareham is $1,738 which includes $2,763,073 in written premium. Give us a call!
Hello Boston, Massachusetts! You all have the highest number of active flood policies – 4,065! The premiums in Boston total $3,311,313, which allows the average flood rate to be $815.
Next is Revere, Massachusetts, where the average flood rate rises slightly to $931. The premiums here total $2,193,368 with 2,355 active flood policies.
$1,337 is the average flood rate for Winthrop, Massachusetts. The active flood policies here number 1,122 with $1,500,658 in written premium.
Our last group to look at includes Clinton and Worcester, Massachusetts, where the average flood rate jumps to $1,885. The premiums for these areas add up to $895,279, with 475 flood policies in effect.
Thanks for checking out all the flood information on Massachusetts!!
Massachusetts flood insurance cost calculator
For decades, the NFIP has over-charged 50 percent of its policyholders and under-charged the other 50 percent, while it has racked up $42 billion in taxpayer-funded losses, equating to more than half of every claim paid by the NFIP since 1978.
About 30 percent of NFIP claims payments go to the same 3 percent of insured “repetitive loss” structures yearly. When you do the math, this means that the other 97 percent of their flood-exposed constituents could have paid in less and still netted larger claims payouts if they had better access to private flood insurance. A recent white paper by Milliman found that 90 percent of homes in Sandy-struck, Massachusetts, and Massachusetts would see reduced flood insurance rates through private insurers.
How to save money on Flood Insurance in MA VE flood zones
All homes that are ocean-facing are custom built, so with this special consideration, our Lloyd’s of London VE flood zone and other Private Flood Insurance options for oceanfront properties consider this with variable coverage options and significant savings. Below is a case study for a property we were shopping for just last week.
Our example was in the EASTHAM, MA area and is in a VE flood zone map.
For the coverage of $250,000 with no contents and a $5,000 deductible, the NFIP annual cost for flood insurance in a VE flood zone is $23,859.00. Ouch!
Since we are who we are and experts in Flood Insurance, we will look at every property every way possible to ensure that we are getting the best premium for our clients, and WE often Do (smile wink)
We tried this same property on our Private flood options and were able to get the premium to under $2,500, and we have, in some cases with similar properties, get the annual premium to $600. This was a feather in our cap and made our clients very happy. Again all properties are unique in these VE flood zones, but if we can find a private flood policy for you, we guarantee it will be better than the NFIP option.