With the incoming threat of multiple hurricanes and tropical storms, flood insurance is a necessity that should not be overlooked — especially since even the best home insurance usually doesn’t cover it. Take-up remains uneven in at‑risk areas, according to the Insurance Information Institute. Flood policies can cover damage from storm surge, riverine flooding, and intense rainfall that overwhelms drainage systems. Operational flood maps from NOAA’s National Water Prediction Service show where water is and where it may go during events, underscoring why households far from the coast can still face serious flood risk.
Read on to learn why flood insurance is a practical safeguard against hurricane and inland flooding, what it covers (including Increased Cost of Compliance), how current pricing works under FEMA’s Risk Rating 2.0, key waiting‑period exceptions, and how to file a claim effectively using today’s hybrid (virtual + in‑person) assessment practices.
Should You Invest in Flood Insurance?
Flooding is among the most damaging weather hazards in the U.S. NOAA’s Billion-Dollar Disasters database shows tropical cyclones are the costliest U.S. peril. Just one inch of water in your home can cause over $25,000 in damage, according to FEMA. At the same time, sea level is rising and high-tide (nuisance) flooding is increasing along many U.S. coasts, with NOAA’s latest outlook noting continued increases into 2025 and beyond as roughly 10–12 inches of additional sea-level rise are projected by 2050 (NOAA High Tide Flooding Outlook).
This is why some homeowners are required to purchase flood insurance if their house is in a high risk area. However, even those who own properties inland should be wary of floods. As pointed out in a map of areas at risk for flash floods published by the National Weather Service, storm-related floods can extend for many miles inland. In fact, one in four flood insurance claims, come from outside high-risk areas, according to FEMA. To understand evolving hazards, pair FEMA’s regulatory maps with NOAA’s near‑real‑time river forecasts and dynamic inundation from NWPS, and note that heavy downpours are intensifying across U.S. regions (EPA Heavy Precipitation indicator). Urbanization and expanding impervious surfaces are also elevating pluvial (stormwater) flood exposure outside mapped Special Flood Hazard Areas; FEMA’s Future of Flood Risk Data initiative aims to deliver more current, risk‑informed data to reflect these realities.
[ Read: Is Hurricane Damage Covered by Flood Insurance? ]
Flood insurance isn’t included in most home insurance coverage — and lenders generally require it for properties with government‑backed mortgages in high‑risk areas, according to FEMA. Even outside high‑risk zones, your lender may require it. Under FEMA’s Risk Rating 2.0, rates reflect each building’s characteristics and location (e.g., flood frequency/severity, distance to water, elevation, replacement cost). Annual changes in the risk‑based premium portion are typically capped at up to 18% for most primary residences and up to 25% for some other categories until reaching full risk rate.
Most NFIP policies have a 30‑day waiting period before coverage takes effect. Key exceptions include: coverage required by a lender in connection with making, increasing, extending, or renewing a loan (generally no waiting period), and policies purchased within 13 months after a map revision (typically a 1‑day wait). Additional timing rules apply in specific circumstances; see FEMA’s Flood Insurance Manual. Planning ahead is essential during hurricane season.
What Types of Flood Insurance Are Available and What Do They Cover?
The National Flood Insurance Program (NFIP) partners with dozens of insurance companies and independent insurance agents to offer a couple of different types of coverage: building property, which protects your home, and personal property, sometimes called “contents,” which covers what’s inside. For most residential policies, NFIP’s statutory maximums are $250,000 for building coverage and $100,000 for contents coverage (FEMA Flood Insurance Manual).
Building property coverage covers the actual structure of the property, including its electrical and plumbing systems, your refrigerator, blinds, carpeting, water heaters, central air conditioners, heat pumps, and sump pumps. Personal property covers your clothing, furniture, microwaves, and televisions. NFIP also offers Increased Cost of Compliance (ICC), which can provide up to $30,000 to help pay for mitigation measures (such as elevating, floodproofing, or demolishing/relocating) when your community determines a covered building is substantially damaged by a flood; ICC is part of the policy and counts toward the maximum building limit (FEMA Manual).
Neither policy type covers damage that was deemed preventable, like anything that was caused by moisture, mildew, or mold. Some items that are not covered include currency, precious metals and papers, like stock certificates. The policies also won’t cover exterior items, like your pool, fence, or landscaping. Always review exclusions and deductibles with your agent and compare NFIP with private flood options where available.
How Much Does Flood Insurance Cost?
The cost of flood insurance is based on a number of factors, including your property’s flood risk. It also takes into account what the policy covers and how much coverage you have. Under Risk Rating 2.0, FEMA uses building‑level risk features (flood frequency/severity, distance to water, elevation, replacement cost). Total billed premium includes non‑risk fees/surcharges detailed in FEMA’s Flood Insurance Manual—for example, the HFIAA surcharge ($25 for most primary residences; $250 for many non‑primary/business policies), the Federal Policy Fee, and the Reserve Fund Assessment.
Latest national snapshot: industry compilations of FEMA data put the average NFIP premium in the high‑$900s for 2023—just under $1,000 (Insurance Information Institute). Because RR2.0 increases continue to phase in with statutory caps (generally up to 18% for most primary residences; up to 25% for some other categories), the 2025 paid average is trending higher (FEMA). For context, inflation alone would lift a commonly cited 2020 average (~$888) to roughly $1,070–$1,100 in 2025 dollars (BLS CPI). The private flood market has also grown and can offer alternative pricing and higher limits depending on risk and coverage design (NAIC Private Flood Insurance).
How To File a Flood Insurance Claim
Time is of the essence when a flood occurs. Be sure you report your loss to your insurance agent or carrier immediately. Call the NFIP at 877-336-2627, if you need help finding your carrier.
Once you initiate the process, an insurance adjuster will assess damages using today’s hybrid approach: virtual/photo tools for lower‑complexity losses and in‑person inspections for complex situations. Before discarding anything, thoroughly document damage with photos and videos, keep receipts, and itemize contents; maintaining a home inventory before a flood speeds this step. Many carriers support photo estimating and digital payments to accelerate straightforward claims (2025 insurance industry outlook; CCC Crash Course). Insurers are expected to maintain strong governance over AI‑enabled claims tools and protect consumers during remote assessments (NAIC AI Model Bulletin).
The Bottom Line
Coastal flood exposure is rising as sea level continues to climb, with U.S. coastlines projected to see about 10–12 inches of additional rise by 2050, increasing the frequency of high‑tide flooding (NOAA). Hurricanes are not clearly increasing in global number, but a higher share are reaching major intensity and producing heavier rainfall—trends that heighten flood risk (NOAA GFDL; IPCC AR6). If you forgo flood insurance, federal aid is limited: FEMA’s Individuals & Households Program provides needs‑based grants up to a program cap that FEMA updates annually (far below typical rebuilding costs), while SBA disaster loans must be repaid with interest. By contrast, NFIP coverage can pay for covered flood damage (building and contents) up to policy limits, and recent household‑level NFIP claim payments often total tens of thousands of dollars per loss (see the Insurance Information Institute for current averages). For many coastal and inland households alike, purchasing flood insurance—well before storms form and the 30‑day waiting period—can save time, money, and heartache.
(Photo by Henrik Sorensen / GettyImages)
