Many people assume that their homeowners insurance automatically covers flood damage, but that isn’t the case. Homeowners who want to be protected from flood damage need to purchase a separate flood policy and some people may even be required to purchase it, depending on the type of mortgage they have and where they live.
If you live in a high-risk flood zone and you have a federally-backed mortgage, your lender may require you to purchase flood insurance. While lenders can choose to require flood insurance as a condition of your mortgage, there are also federal mandates that require this coverage on all homes and buildings in special flood hazard areas.
When is flood insurance required by law?
If you’re taking out a government-backed mortgage and your home is in a high-risk area, your mortgage lender will require you to purchase flood insurance before extending you the loan. You may be required to buy flood insurance if you use one of these lenders:
Federal Housing Administration (FHA)
Veterans Affairs (VA)
United States Department of Agriculture (USDA)
These lenders require homes and businesses in high-risk flood zones to have flood insurance to account for the increased financial risk.
In some cases your lender may also require flood insurance regardless of whether your mortgage is federally backed or not, like if you have a conforming mortgage secured by Fannie Mae and Freddie Mac. In most cases, Fannie and Freddie won’t agree to secure a mortgage on a home in a high-risk area without a flood insurance policy, so lenders often require coverage for this reason.
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What flood zones require flood insurance?
Whether or not you need flood insurance depends on your home’s FEMA-designated flood zone. Here’s a breakdown of flood insurance requirements for various types of flood zones.
Is flood insurance required in zone A or V?
Flood zones A or V, or areas shaded blue on FEMA flood maps, are considered to be at the highest risk of flooding. Also known as Special Flood Hazard Areas, A and V flood zones have a 1% chance of flooding every year, and a 26% chance of flooding over the course of a 30-year mortgage.
If your home or business is in an A or V flood zone and you have a mortgage, you’ll likely have to purchase enough flood insurance to cover one of the following (whichever is lowest):
The principal balance of the mortgage
The maximum amount of building coverage available ($250,000) through the NFIP
The replacement cost of your home, or the cost to rebuild
If you need flood insurance as part of your mortgage, you’ll likely be required to keep the home insured until the mortgage is completely paid off.
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Is flood insurance required in zone X?
Zone X is considered a medium- to low-risk flood zone. Shown as areas shaded orange on FEMA flood maps, zone X represents moderate flood hazard areas that have a 0.2% chance of flooding every year, and a 6% chance of flooding over the course of a 30-year mortgage.
Homeowners with a government-backed mortgage in zone X generally aren’t required to purchase flood insurance, but there are still times when it may be required regardless of your mortgage type. For example, homeowners who have received FEMA grants in the past and want to be eligible for future assistance may be required to purchase flood insurance.
But homeowners living outside of high-risk flood zones shouldn’t rely exclusively on FEMA disaster assistance, says Mark Friedlander, spokesman for the Insurance Information Institute (Triple-I). “Relying on FEMA emergency funds is not a substitute for having adequate property insurance and flood insurance coverage,” says Friedlander. “It is a very complex process to get approved for a FEMA grant and you typically only get a very small portion of funds to cover losses to your property.”
Over 40% of all NFIP claims filed from 2014 to 2018 were from policyholders outside of high-risk flood areas. It’s also estimated that existing FEMA flood maps haven’t accounted for up to 6 million properties located in 100-year floodplains. 
Additionally, homeowners in Zones B, C, and X are often eligible for preferred risk policies, which are basically a cheaper flood insurance option from the NFIP, the main provider of flood insurance in the U.S.
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Where can I get flood insurance?
Most home insurance companies offer flood insurance coverage, so you might be able to buy flood insurance from your current insurer. Nearly every major insurance company offers NFIP flood insurance to residents of participating communities, but some may also provide their own private flood insurance. In this section, we’ll walk you through the different types of flood insurance available to you. 
1. The National Flood Insurance Program
NFIP flood insurance is backed by the federal government and provided by private insurance companies. Government flood insurance offers up to $250,000 in buildings coverage for your home, and you’re able to add up to $100,000 in contents coverage for your belongings if you choose. NFIP flood insurance only includes buildings coverage by default, so you’ll need to add contents coverage separately for an additional amount. 
2. Private flood insurance
You also have the option of purchasing private flood insurance which is written and backed by private insurance companies instead of the government. Private flood insurance providers generally offer higher coverage amounts than the NFIP’s plan, and policies are often cheaper in lower risk areas.
Private flood insurance is typically available as a standalone policy or as an endorsement that you can add onto your homeowners insurance.
3. Excess flood insurance
Since NFIP coverage limits aren’t always high enough to pay for a full rebuild of your home or replace all of your belongings, many insurance companies offer excess flood insurance as a safety net policy. Excess flood insurance increases your coverage limits if the damage to your home exceeds $250,000 or if damage to your personal belongings exceeds $100,000.
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How much does flood insurance cost?
As of 2023, the average cost of flood insurance through the National Flood Insurance Program is around $888 per year, according to an analysis of FEMA policy data. The amount you pay for flood insurance will depend on:
Your home’s flood risk: Your flood insurance rates are based primarily on your home’s likelihood of being flooded. If your house is in a high-risk flood zone, expect your rates to be north of $1,000.
Your coverage types and amounts: The more building or contents coverage you choose, the higher your flood insurance premiums will be.
Your home’s age and build: The age and construction of your home will also impact your flood insurance rates. Homes without flood mitigation features, like flood openings or barriers, or home’s not built to modern floodproofing standards are likely going to cost more to insure.
Your policy deductible amount: Your policy deductible is the amount you’re responsible for paying before flood insurance will cover your claim. A higher deductible means lower rates, but it also means you’ll be paying more out of pocket if you ever file a claim for flood damages.
Flood insurance costs will likely change in the near future thanks to Risk Rating 2.0, the NFIP’s new method for calculating flood insurance rates. The changes, which kicked in on new policies in October 2021 and existing policies in April 2022, are expected to increase flood insurance costs on roughly 77% of existing policies.