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Minnesota Flooding maps

Does my Minnesota homeowner insurance cover flooding?

A typical Minnesota 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 Minnesota?

It is important to have flood insurance coverage in Minnesota 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 Minnesota 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.

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.

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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.

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?

Minnesota flood rate maps

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 Minnesota, 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 Minnesota 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 Minnesota 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 Minnesota?

Minnesota NFIP flood insurance.

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

Government and Private flood insurance

Yes, Please shop my 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.

Not “private flood insurance” but NFIP Resellers

Progressive Flood Insurance

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.

https://www.fema.gov/wyo_company

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Minnesota 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 Minnesota. 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 Minnesota Market

Minnesota 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.

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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.

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

Lloyds of London Flood Insurance

NFIP 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.

How much does flood insurance cost in Minnesota?

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

Minnesota flood insurance low-to Moderate Risk rate and cost.
This is Flood Zone X, which is not lender required flood zone.

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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.

The average cost for flood insurance in Minnesota 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

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

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 Minnesota 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 Minnesota with a basement foundation.

We will look at the Minnesota 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 Minnesota.

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

Our example is in Minneapolis, but the premiums will be the same if in Edina, Rochester, St. Paul, Stearns and many other Minnesota flood zones.

In our example, the Base Flood Elevation (BFE is 824 and is a home that is built before 1973)

NFIP option in Minnesota 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 $3,522.00

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

Yes, Please shop my Flood Insurance

Minnesota 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 $980.00

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.

Base Flood elevation Oregon

Minnesota 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 $1,236.00

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 5368, if the lowest floor is 5364, 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.

 

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 $3,170.00

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.

Yes, Please shop my Flood Insurance

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

The annual premium in the High-Risk flood zone is $1,793.93.

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 premium. 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.

FEMA FLood Insurance Rate Maps

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 $1,364.25

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.

Yes, Please shop my Flood Insurance

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

Currently, Minnesota has 8,694 NFIP policies in force to date with the total cost of $7,828,757. That would make the average for Minnesota $900. Of course, some will pay more, and some will pay less.

Click here to have us shop and save you money.

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

Let’s start with Aitkin, Minnesota.  Aitkin has 135 active flood policies with $132,912 in written premiums.  The average flood rate in Aitkin is $985.

Benton, Minnesota has an average flood rate of $1,006.  There are 113 flood policies in effect with $113,660 in total premiums.

In Rushford, Lake City, and Bloomington, Minnesota, there are 178 active flood policies with $99,598 in written premiums.  The average flood rate in these areas is $560.

Edina, MN has the highest number of flood policies in the state with 236 active policies.  The average flood rate in Edina is $811 which includes $191,327 in total premiums.

Hello Minneapolis, Minnesota!  Nice to have you here!  You have 177 active flood policies with $154,368 in written premiums.  The average flood rate in Minneapolis is $872.

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In Minnetonka, Plymouth, and St. Louis Park, Minnesota, there are 258 flood policies in effect.  The total premiums written in these areas are $214,284 which allows the average flood rate to be $831.

Austin, Minnesota has 100 active flood policies and $99,621 in written premiums.  The average flood rate in Austin is $996.

FLOOD NERD FISHINGThe total premiums in Worthington, Minnesota is $121,652.  The average flood rate in Worthington is $1,181 which includes 103 flood policies in effect.

The rate drops dramatically to $575 when we look at Rochester, Minnesota.  The total active policies in Rochester is 165 with $94,796 in total flood premiums.

In Pine, Minnesota, there are 129 flood policies with $109,883 in flood premiums.  This allows the average flood rate for Pine to be $852.

Let’s look at East Grand Forks and Polk, Minnesota.  Combined, these two areas have 141 active flood policies.  The average flood rate for this area is $1,004 which includes $141,604 in total flood premiums.

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When we move over to St. Paul, MN the average flood rate drops a bit to $869.  This includes $137,258 in premiums with 158 total active policies in St. Paul, Minnesota.

There are 249 active flood policies in Rice, Roseau, Jordan, and Prior Lake, Minnesota.  The total premiums for these areas are $311,679 which allows the average flood rate to be $1,252.

$891 is the average flood rate for Sherburne, Minnesota.  The total number of policies in Sherburne is 106 with $94,443 in flood premiums.

Duluth, Minnesota has 140 active flood policies and $110,462 in flood premiums.  The average flood rate for Duluth is $789.  Thanks for checking out our page Duluth!

107 flood policies are in effect in St. Louis, Minnesota.  The average flood rate in St. Louis is $929 which includes $99,412 in written premiums.

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Hello Stearns, Minnesota!  You all have an average flood rate of $902.  This includes 129 active flood policies and $116,317 in premiums.

The average flood rate jumps to $1,853 in Owatonna, Minnesota.  The total premiums in Owatonna are $174,163 with 94 flood policies in effect.

Bayport, Minnesota has 92 active flood policies and $137,240 in total premiums.  The allows the average flood rate for Bayport to be $1,492.

The average flood rate drops just a little in Winona, Minnesota to $1,443.  The premiums in Winona total up to $155,879 with 108 total flood policies.

Last, but not least, let’s look at Wright, Minnesota.  Wright has 83 active flood policies and $101,986 in total premiums.  The average flood rate for Wright is $1,229.

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

Flood Insurance in Minnesota

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.

Yes, Please shop my Flood Insurance

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.




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-mn
https://mn.gov/commerce/consumers/your-home/protect/other/floods/basics.jsp