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Flood Insurance Michigan

Michigan flooding map

Does my Michigan homeowner insurance cover flooding?

A typical Michigan 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.

Flooding maps

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Do I need flood insurance in Michigan?

It is important to have flood insurance coverage in Michigan because our beloved Cowboy State has seen a fair share of flooding, and there is likely more coming.

We believe that most homeowners think about Flood insurance in Michigan 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 is looming, or we have heard on the news that there is flooding forecasted or happening currently too close to our home.

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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 agents and some insurance agents may even say you don’t need it.

Flood zone maps Michigan

Flood Zone Maps Michigan

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, they had water in their home 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.

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Michigan flooding map

We hear often that people believe that the government will help, and this is true.  However, there are a few things that 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 – The average amount of assistance that homeowners get 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 away your financial future by forgoing flood insurance coverage?

https://www.bloomberg.com/graphics/2017-fema-faulty-flood-maps/
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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, then 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 for part of the risk. Our recent storms are facts that it can rain anywhere within Michigan, 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” then it really is.

The average cost for Michigan flood insurance in these Low-risk areas is $595 per year.

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FEMA’s National Flood Insurance Program (NFIP) and all federally backed lenders rely on these Michigan flood insurance maps to assess risk, set premiums, and determine who is required to purchase flood insurance. Bad information about an areas flood risk can leave property owners under or uninsured.

 

How much is flood insurance in Michigan?

There are many options available in Michigan regarding flood insurance, but they basically fall into two main categories.

  1. The government option (the NFIP also called FEMA)

  2. The Private Flood insurance market

Michigan NFIP flood insurance.

The National Flood Insurance Program (NFIP), also known as FEMA, which is the government option for flood insurance.  The NFIP has enjoyed a 50-state monopoly on the flood insurance market.

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Not “private flood insurance” but NFIP Resellers

If you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any of the of the logos below then 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.

Progressive Flood Insurancehttps://www.fema.gov/wyo_company

Cheap Flood Insurance Michigan

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Michigan private flood insurance market

 

Llloyds of London Flood Insurance ShopperThere are alternatives to the NFIP or government insurance.  It is called Private flood insurance most notably Lloyds of London Flood insurance, however, there are other options available in Michigan. We shop all the options for your property in your region to ensure you are getting the best premium.  If you are ready to have us do the work for you, please click here.

Our shopping does include the NFIP because sometimes we find that with government subsidies you can get a much better premium.

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Lloyds of London Flood Insurance Michigan Market

 

Michigan 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 and is attributed to have invented the very first modern insurance model. Unlike most of its competition, Lloyds of London is not really a company but rather a corporate body.  This structure works quite well since it has been around for over 330 years. Lloyds operates under multiple financial backers that all pool their capital to spread the risk.

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I have two blog posts that take a deep dive into Lloyds of London and what they mean to Michigan ’s flood insurance market.  If you are interested, the links are below.

Lloyds of London Flood Insurance

FEMA vs Private flood insurance

Lloyds also insures the world for flood insurance, meaning they cover flooding events in India, Australia as well as much of Europe.  You see the “game” of insurance is to spread your risk since Lloyds is worldwide.

Lloyds of London Private Market Flood InsruanceMy joke here is that Lloyds is banking on Gods promise that he won’t flood the entire world again, …..so they won’t have to pay out the whole worlds flood claim.

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How much does flood insurance cost in Michigan?

There are many factors that go into getting the cost of flood insurance for Michigan. If your home is in what is considered low-to-moderate risk, you can get a heavily subsidized policy though the government.

Michigan 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 grid below):

Here a link if you want to really dig into this one. Be ready for an eye chart because every option is public record and should be standardized accost whoever writes these policies.

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A flood zone and SHFA rate maps
FEMA High-risk Rates

The average cost for flood insurance in Michigan with the maximum set limits in these Low-risk flood zone areas is $405 – $700 per year.

https://www.fema.gov/media-library-data/1523307331106-4cf9726b2eb04c3471a3e9d37a58fa6a/09_prp_508_apr2018.pdf

If your property is in higher-risk flood zone, it is usually identified with a Flood Zone AE. Your lender will require you to have flood insurance. The cost of flood insurance in Michigan depends on many factors that are unique to the structure. We are going to try to give you an idea for the most common homes we see in Michigan with a slab on grade foundation.

We will look at the Michigan 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, as well as on a few of our private flood insurance policies, specifically Lloyds flood insurance options in Michigan.

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Cost of Flood Insurance in MICHIGAN in high-risk flood zone AE

Our example is in Clay, but the premiums will be the same if in Harrison, Lansing, Detroit, Dearborn and many other Michigan flood ones.

In our example, the Base Flood Elevation (BFE is 579) and is a home that is built before 1973

NFIP option in Michigan 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 $3,599.00

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

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Michigan Private flood insurance – Lloyds of London Flood Insurance (option 1)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 1) Annual premium in High-Risk flood zone is $815.00

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 do offer coverage for basements, about $2,000 for loss of use, $2,000 for other structures, but they can’t increase this coverage. They do not require an Elevation Certificate to rate.

Michigan Private flood insurance – Lloyds of London Flood Insurance (option 2)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 2)  Annual premium in High-Risk flood zone is $984.58

This option is great, and we are very happy when we can get this option for our clients as well. They seem to be writing almost all risks; however, they do not write any property that is in a designated floodway or has the depth of -4 under the BFE.  In our example, with our BFE being 579, if the lowest floor is 575, then they will not accept this risk.  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, then that will need to be added.

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Private Flood insurance option (option 3) Not Lloyds

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Annual premium in High-Risk flood zone is $3,240.00

This option will take properties that have had one flood loss as long as it has been 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 –  Lloyds of London (option 4)

This option must be written on the Replacement Cost Value (RCV) of the building, 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

Annual premium in High-Risk flood zone is $482.25 (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, which is a bit different from some of our other Lloyd’s flood options.  We usually reserve this one if the property doesn’t fit into any of our options above. We can adjust coverages to control premiums. As mentioned before, this underwriters’ rates are all over the board.  It is worth shopping through to make sure we are getting you the best premium we can. They don’t need an elevation certificate to rate.

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Private Flood insurance –  Lloyds of London (option 5)

Coverage of $250,000 (RCV) building coverage, No Contents and $5,000 deductible.

Annual premium in High-Risk flood zone is $1,015.86

This option came out of the company that used to run the NFIP program, so the coverage almost exactly matches the NFIP coverage with two differences. They offer living expenses which will cover your cost, when you are displaced from your home during repairs (most Lloyds flood policies offer this).  They also offer swimming pool clean out, which is kind of unique so if you have a pool ask for this coverage.

Private Flood insurance –  Lloyds of London (option 6)

Coverage of $250,000 (RCV) building coverage. No Contents and $5,000 deductible.

Annual premium in 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 we will watch them. They have a slick system, and their underwriting is managed by a 3rd party, which also seems to be a glitch sometimes.

 

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FEMA FLood Insurance Rate Maps

There are more options coming online every day, and we are working to be looking into every viable option.

Michigan Flood Plain Map

Currently, Michigan has 20,232 NFIP policies in force to date with the total cost of $20,395,079.  That would make the average for Michigan $1,008. Of course, some will pay more, and some will pay less.

Click here to have us shop and save you money.

Flood Insurance Michigan

Hello, Michigan!  Thanks for visiting our page for all your flood insurance needs.

Let’s start off with Saugatuck and Alpena, Michigan.  In Saugatuck and Alpena, the average flood rate is $684.  There are 175 active flood policies in these areas with $119,615 in total premiums.

Next, let’s check out Standish and Orangeville, Michigan where there are 100 flood policies in effect.  The premiums here total $117,236 which allows the average flood rate to be $1,172.

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We’ll look at Bangor, Michigan next where there are $349,549 in total flood premiums and 354 active flood policies.  The average flood rate for Bangor is $987.

Bay City and Fraser, Michigan are up next with an average flood rate of $716.  There are 209 active flood policies and $149,625 in premiums in Bay City and Fraser.

$1,073 is the average flood rate for Hampton and Kawkawlin, Michigan.  This includes 154 flood policies and $165,272 in total premiums.

251 flood policies are active in Midland, Michigan.  Midland has $220,588 in flood premiums, which causes the average flood rate to be $879.

Let’s check out a group of areas: Pinconning, New Buffalo, and Battle Creek where the average flood rate is $680.  There are 224 flood policies and $152,364 in premiums in these areas.

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The average flood rate in East Lansing, Michigan is much higher than the state average at $2,604.  There are 121 active flood policies and $315,098 in total premiums.  Please contact us East Lansing so we can check prices for you!

In Lansing, Michigan, the average flood rate drops to $1,971, which is still higher than the state average!  This includes 360 flood policies in effect and $709,477 in flood premiums.

There are $204,627 in flood premiums in Eaton Rapids, Burton, Alma, and Fairhaven, Michigan.  The total number of active flood policies here is 201, which causes the average flood rate to be $1,018.

When we look at Flint, Grand Blanc, Swartz Creek, Sebewaing, Delhi, and Mason, Michigan, we find an average flood rate of $1,138.  There are 319 flood policies in effect in these areas and $363,021 in total premiums.

FLOOD NERD FISHINGMeridian, Michigan has 195 flood policies active and $261,393 in flood premiums.  The average flood rate for Meridian is $1,340.

Let’s check out another group of areas in Michigan: East Tawas, Oscoda, and Tawas City where the average flood rate is $726.  The total number of active policies here is 166 with $120,528 in written premiums.

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Looking at Leoni and Kalamazoo, Michigan, we find 132 active flood policies and an average flood rate of $1,974.  The premiums for Leoni and Kalamazoo total up to $260,633.  Please contact us to check flood rates for your area!

Hello Grand Rapids, Michigan!  Thanks for stopping by!  Your average flood rate is $1,515.  There are 102 flood policies in effect in Grand Rapids.  The premiums total up to $154,560 here.

We’ve got another group of cities to look at: Grandville, Lowell, Green Oak, and Hamburg, Michigan where there are 338 active flood policies.  The premiums in these areas total up to $598,917 which causes the average flood rate to be $1,772.

Next let’s check out Plainfield and Wyoming, Michigan where the average flood rate jumps to $2,013.  The active flood policies here total 182 with $366,354 in total premiums.

Chesterfield, Michigan has an average flood rate of $888.  The total number of flood policies in Chesterfield is 297 with $263,702 in flood premiums.

$988 is the average flood rate for Clinton, Michigan.  Clinton has 103 active flood policies and $101,782 in premiums.

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505 flood policies are in effect in Harrison, Michigan.  Harrison also have $547,116 in total flood premiums which causes the average flood rate to be $1,083.

There are 138 flood policies active in Macomb and New Baltimore, Michigan.  The average flood rate for Macomb and New Baltimore is $1,032 which includes $142,349 in written premiums.

In St. Clair Shores, Michigan, there are $231,022 in flood premiums and 218 total active flood policies.  The average flood rate for St. Clair Shores is $1,060.

Let’s look at Sterling Heights, Warren, Erie, and Estral Beach, Michigan.  These areas have a combined average flood rate of $1,125.  The premiums here total up to $403,856 which includes 359 active flood policies.

Next let’s check out Bedford and Berlin, Michigan where there are 179 flood policies in effect.  The average flood rate here is $1,042 with $186,601 in total flood premiums.

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Frenchtown, Michigan has an average flood rate of $943.  The total number of flood policies in Frenchtown is 407 with $383,817 in flood premiums.

The average flood rate goes up to $1,176 for Lasalle, Michigan.  The number of policies that are active is 111 which includes $130,500 in written premiums.

$817 is what the average flood rate is for Luna Pier, Michigan.  The premiums in Luna Pier total $241,923 and the total number of flood policies here is 296.

336 policies are active in Monroe, Michigan.  The flood premiums in Monroe total $345,494 which allows the average flood rate to be $1,028.

Now let’s check out Muskego, North Muskego, Norton Shores, Farmington Hills, Farmington, Southfield, Troy, Georgetown, and Holland, Michigan.  This group has an average flood rate of $856.  The active policies here total 873 with $747,227 in total premiums.

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Next, we’ll look at Birmingham, Bloomfield, Novi, Royal Oak, Waterford, West Bloomfield, Spring Lake, and Buena Vista, Michigan where there are 555 flood policies in effect. The premiums in these areas total up to $585,823 which allows the average flood rate to be $1,056.

Carrollton, Michigan has $108,928 in flood premiums and 130 active flood policies.  The average flood rate for Carrollton is $838.

$1,095 is the average flood rate for James, Michigan.  The total number of active flood policies in James is 142 with $155,553 in written premiums.

372 flood policies are in effect in Saginaw, Michigan.  Saginaw has an average flood rate of $693 which includes $257,942 in total premiums.

In Spaulding and St. Charles, Michigan, the average flood rate is $1,012.  The total number active flood policies are 119 with $120,371 in flood premiums.

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There are 129 flood policies in effect in Thomas, Michigan.  Thomas has an average flood rate of $1,048 which includes $135,247 in total premiums.

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Let us to the flood insurance shopping for you – Save time.

When we look at Zilwaukee, Michigan, we find an average flood rate of $796.  Zilwaukee has 196 active flood policies and $156,072 in written premiums.

$183,058 is the flood premium total for Caledonia and Owosso, Michigan.  The average flood rate for Caledonia and Owosso is $1,058 which includes 173 active flood policies.

The average flood rate drops to $786 in Algonac, Michigan.  Algonac has $182,404 in total premiums and 232 total policies in effect.

Clay, Michigan has quite a few flood policies, 736 to be exact!  The average flood rate in Clay is $837 which includes $616,320 in total flood premiums.

Let’s look at East China, Michigan, where the average flood rate is $995.  East China has 136 flood policies in effect with $135,278 in total written premiums.

Ira, Michigan has $129,993 in flood premiums and 162 active flood policies.  Ira’s average flood rate is $802.

There are 120 flood policies in effect in Three Rivers and Vassar, Michigan.  Three Rivers and Vassar have an average flood rate of $829, which includes $99,507 in flood premiums.

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Thanks for stopping by Ann Arbor, Michigan!  You all have 409 flood policies active and $413,385 in flood premiums.  Your average flood rate for Ann Arbor is $1,011.

$1,168 is the average flood rate for Northfield and Allen Park, Michigan.  Northfield and Allen Park have $147,108 in flood premiums and 126 flood policies in effect.

267 total flood policies are active in Brownstown and Canton, Michigan.  Brownstown and Canton have an average flood rate of $861, which includes $230,016 in flood premiums.

Hello Dearborn Heights!  You all have the highest number of flood policies in the state at 833.  The premiums in Dearborn Heights add up to $912,817.  The average flood rate here is $1,096.  Thanks for stopping by Dearborn Heights!  Give us a call!

Dearborn, Michigan has quite a few less active flood policies than Dearborn Heights, 141 to be specific.  Dearborn’s average flood rate is $1,118 which includes $157,641 in flood premiums.

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Detroit!  Also known as Motor City!  Home of the Detroit Lions!  So glad to have you here!  Detroit’s average flood rate is $634.  The total number of active flood policies in Detroit is 283 and the premiums total $179,335.

$1,064 is the average flood rate for Ecorse and Flat Rock, Michigan.  The premiums in Ecorse and Flat Rock total $239,353 and the total number of flood policies in effect is 225.

273 flood policies are active in Gibraltar, Michigan.  Gibraltar has a total of $336,743 in flood premiums and an average flood rate of $1,233.

Looking at Lincoln Park and Plymouth, Michigan, we see an average flood rate of $920.  The total number of flood policies in effect here is 188, which includes $173,007 in total written premiums.

Next, let’s look at Redford and Rockwood, Michigan where there are 192 policies in effect.  The average flood rate for Redford and Rockwood is $972, which includes $186,698 in flood premiums.

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Now, we’ll check out Taylor, Michigan, where there are $303,602 in written flood premiums.  The number of active policies in Taylor is 226 which allows the average flood rate to be $1,343.

Trenton, Michigan’s average flood rate is $677.  Trenton has 252 active flood policies and $170,648 in written flood premium.

Finally, we’ll look at Woodhaven, Michigan.  Woodhaven has 67 active flood policies and $63,804 in flood premiums.  The average flood rate for Woodhaven is $952.

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Thanks for checking out all the flood information on Michigan!!

Flood Insurance Cost Calculator Michigan

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 year after year. 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. In fact, a recent white paper by Milliman found that 90 percent of homes in Sandy-struck New York and New Jersey would see reduced flood insurance rates through private insurers.

 

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References
the following documents contain additional hydrologic data, flood photos, historic flood descriptions, floodplain delineations and other pertinent information, and should be considered supplemental to this flood warning plan:
https://bsa.nfipstat.fema.gov/reports/1011.htm#COT
https://www.fema.gov/average-claim-payments-date-loss
https://www.fema.gov/national-flood-insurance-program
https://www.fema.gov/media-library-data/1486576697135-ac6348fb2a3d98ceba33cf3f38422dbc/Claim_Loss_Counts_Sept2016.pdf
https://www.fema.gov/media-library-data/1458666638945-d752cb148ef1348b4b1c22acec66a0bd/Claim_loss_count2015.pdf
https://www.fema.gov/media-library-data/1393877884619-3091f75bf9d46a26f5beb7d423c34529/Total_Claim_Count_fy2013.pdf
https://www.weather.gov/safety/flood-states-mi