The Reality of Flood Insurance Price Hikes

Estimated read time 5 min read

The Reality of Flood Insurance Price Hikes

In recent years, the cost of flood insurance has been on the rise, leaving many property owners grappling with soaring premiums. This surge in flood insurance costs is a concerning trend, driven by various factors such as changing weather patterns, increased flood risk, and evolving insurance industry dynamics. In this article, we delve into the reasons behind the skyrocketing flood insurance rates and provide insights to help property owners navigate this challenging landscape.

The Reality of Flood Insurance Price Hikes

Reason behind increase flood insurance:

  • Increasing Flood Risk: Climate change-induced weather events, such as heavy rainfall, storm surges, and rising sea levels, are amplifying flood risk in many regions. As flood frequency and severity escalate, insurers face greater potential liabilities, prompting them to adjust premiums accordingly.
  • Cost of Claims: Flood-related claims have become more frequent and costly in recent years, driven by the growing incidence of severe weather events and urban development in flood-prone areas. The rising cost of claims exerts upward pressure on insurance premiums to maintain solvency and cover payouts.
  • Mapping Updates: The Federal Emergency Management Agency (FEMA) periodically updates flood maps to reflect changes in flood risk. Property reclassification due to updated mapping can result in higher insurance premiums, especially for properties newly identified as high-risk flood zones.

Strategies to decrease flood insurance expenses:

  • Obtain an Elevation Certificate: Obtain an elevation certificate from a licensed surveyor to accurately determine your property’s elevation in relation to the base flood elevation (BFE). A lower elevation relative to the BFE may qualify you for reduced flood insurance premiums, as it signifies lower flood risk.
  • Explore Flood Zone Designations: Investigate whether your property’s flood zone designation accurately reflects its risk level. Changes in flood mapping or mitigation efforts in your area may warrant a review of your property’s classification. If you believe your property is incorrectly designated, work with local authorities or insurance professionals to reassess its classification and potentially qualify for lower premiums.
  • Increase Deductibles: Consider opting for a higher deductible on your flood insurance policy to lower premium costs. By assuming a greater portion of the risk, you may qualify for reduced premiums. However, be sure to assess your financial ability to cover the deductible in the event of a flood-related claim.

Vital Protection

Think you’re immune to flood risks? Consider these points:

  1. Approximately a quarter of flood insurance claims originate from areas deemed low-risk.
  2. Six out of every ten disasters declared by the President involve flooding.
  3. Flooding can occur in any state and at any time throughout the year.
  4. Federal assistance for disasters is only accessible if a federal disaster is declared, a scenario that unfolds in fewer than half of all flood events. In contrast, flood insurance covers your eligible losses, irrespective of a federal declaration.
  5. Federal disaster aid typically offers only partial recovery in the form of a loan, potentially resulting in monthly payments that surpass the average annual flood insurance premium.

If you don’t procure and maintain flood  coverage subsequent to receiving federal disaster aid, you may become ineligible for future assistance in the event of disasters.


Q.1) How much can I expect my flood insurance rates to increase?

Ans: The extent of flood insurance rate increases varies depending on factors such as property location, flood risk, coverage limits, and policy terms. Rate increases may range from modest adjustments to significant spikes in premiums.

Q.2) Is flood insurance coverage mandatory?

Ans: While flood insurance coverage is not always mandatory for all properties, it may be required for properties located in designated flood hazard areas or those with mortgages from federally regulated or insured lenders. Even if not mandatory, obtaining flood insurance is highly recommended to protect against financial losses from flood-related damage.

Q.3) Can I reduce my flood insurance premiums?

Ans: Yes, there are several strategies to potentially reduce flood insurance premiums, including implementing flood mitigation measures, obtaining elevation certificates, shopping around for coverage, exploring government programs, increasing deductibles, and maintaining continuous coverage.

Q.4) How can I assess whether the increase in flood insurance rates is justified for my property?

Ans: To assess the justification of flood insurance rate increases for your property, evaluate factors such as updated flood risk assessments, changes in flood mapping, property improvements, mitigation efforts, and available coverage options. Consulting with insurance professionals and flood risk experts can provide valuable insights into the rationale behind rate increases.

Q.5) What steps should I take if I believe my flood insurance rates are unfairly increased?

Ans: If you believe your flood insurance rates have been unfairly increased, gather relevant information, review policy terms, and communicate with your insurance provider to understand the reasons behind the rate adjustment. Consider appealing the decision, exploring alternative coverage options, or seeking assistance from regulatory authorities or consumer advocacy organizations.

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