Considering getting flood insurance after Milton and Helene? Here's what to expect

In recent weeks, residents of western North Carolina have become increasingly aware of the necessity of purchasing flood insurance. This shift highlights the potential for significant flood damage even in non-coastal areas. Observations emphasize that all regions are susceptible to flooding, yet the lack of flood insurance represents a major gap in coverage across the United States.

Homeowners with mortgages are usually required to have home insurance, but these policies generally do not cover flood damage. Flood insurance must be procured separately, often through the National Flood Insurance Program (NFIP), which is supported by a federal agency. These policies are available through private insurers for residents in specific areas that have met certain flood risk reduction criteria. Coverage typically includes structural damage up to $250,000 and contents up to $100,000 for homes, while businesses have coverage limits up to $500,000.

There is a notable waiting period for NFIP policies, which generate coverage 30 days post-purchase. The process of resolving claims can be extensive, highlighting the importance of securing coverage before adverse weather events occur.

In regions not traditionally considered high-risk for floods, insurance tends to be more affordable. On average, NFIP insurance costs approximately $1,000 annually, with lower-risk areas potentially seeing rates between $480 and $600 annually. Private insurers also offer competitive rates and enhanced coverage options.

However, as extreme weather events increase in frequency and severity, consumers should brace for potential rises in insurance premiums. Particularly after significant events, insurers may respond by increasing rates or exiting markets. A key factor influencing these decisions is the cost of reinsurance, which affects the overall affordability and availability of flood insurance coverage.