2023 – Save money on flood insurance in South Dakota today.
Does my South Dakota homeowner insurance cover flooding?
A typical South Dakota 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 South Dakota?
It is important to have flood insurance coverage in South Dakota 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 South Dakota 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.
We believe that most homeowners think about Flood insurance in South Dakota 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 a 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.
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 homes or buildings 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 in 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/
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 South Dakota, 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 South Dakota 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 South Dakota 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 South Dakota?
South Dakota NFIP flood insurance.
There are many options available in South Dakota regarding flood insurance, but they basically fall into two main categories. The National Flood Insurance Program (NFIP also referred to as FEMA) we call I the government option, and the private flood insurance market.
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
If you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any 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
South Dakota private flood insurance market
There 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 South Dakota. 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.
There are alternatives to the NFIP or government insurance. It is called Private flood insurance most notablyOur shopping does include the NFIP because sometimes we find that with government subsidies you can get a much better premium.
Lloyds of London Flood Insurance South Dakota Market
South Dakota 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.
I have two blog posts that take a deep dive into Lloyds of London and what they mean to South Dakota’s flood insurance market. Iif you are interested, the links are below.
Lloyds of London Flood Insurance
Private flood insurance vs NFIP
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.
My 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 world’s flood claim.
How much does flood insurance cost in South Dakota?
There are many factors that go into getting the cost of flood insurance for South Dakota. If your home is in what is considered a low-to-moderate risk, you can get a heavily subsidized policy though the government.
South Dakota flood insurance low-to Moderate Risk rate and cost.
This is Flood Zone X, which is not the 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 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 South Dakota 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
