Wild weather in 2023 has brought widespread, unpredictable flooding across the U.S. This week the first tropical storm in 84 years, Tropical Storm Hilary, hit Southern California, bringing record-breaking rainfall of up to 12 inches and drenching desert cities and landscapes all the way east to Las Vegas.
With intense flooding in places like Alaska and Vermont plus predictions of an above-normal hurricane season in 2023, it’s worth reconsidering flood insurance coverage no matter where you live.
“If you’re anywhere near water, even a small body of water, you’re at risk of flooding,” says Susanna Pho, CEO of Forerunner, a platform used by local governments for flood prevention management.
But homeowners insurance does not cover flood risk. In a recent Forbes Advisor survey, 36% of respondents incorrectly said that it does. Only a flood insurance policy will cover flood damage. Most Americans can get a flood policy from the federal government’s National Flood Insurance Program; policies are also available from private insurers such as Liberty Mutual and Chubb.
Who’s At Risk?
It’s understandable that flood insurance hasn’t been a priority for homeowners and renters in places like Palm Springs, California. People who live in desert environments don’t necessarily expect flooding, despite the fierce rainstorms that sometimes come.
In regions that the Federal Emergency Management Agency (FEMA) considers flood-prone, there’s more incentive to invest in insurance. Home buyers seeking a mortgage on property in a FEMA-designated Special Flood Hazard Area generally find that lenders require a flood insurance policy.
Otherwise, most homeowners do the risk assessment themselves. Many miss the mark, even in places where floods occur regularly.
In September 2022, Hurricane Ian ravaged Florida with more than 20 inches of rainfall and winds of up to 155 mph, causing floods across the peninsula and leaving behind $113 billion worth of damage. According to media reports, most Florida homes affected by Ian did not have flood insurance.
Why Knowing Your Flood Risk Is Harder Than You Think
In connection with the NFIP, FEMA keeps a database of risk maps that rate localities across the nation based on flood vulnerability. Lenders and other real estate investors rely on those maps. But the maps don’t tell the whole story.
- FEMA flood maps are likely outdated due to climate change. They use history as a basis for predicting what’s going to happen, meaning they don’t take the impact of climate change into account, according to a report by the Natural Resources Defense Council. Result: They’re less reliable for communities and government officials working on flood mitigation.
- Aging flood infrastructure may be in disrepair. Until it’s tested, property owners may not know how old their area’s flood infrastructure is and whether it has had failures in the past. “Older infrastructure, like drainage systems, levees, and dams pose a significant flood risk,” says Omar Ochoa, the city attorney of Edinburg, Texas, whose private practice firm has expertise in environmental law. “When the instruments designed to prevent flooding are unreliable, it becomes difficult to know the true risk of flooding.”
- The weather doesn’t confine itself to designated flood zones. John Dickson, CEO and president of private flood insurance company Aon Edge, says that where it rains, it can flood. In other words, water doesn’t stop at the artificial lines on a map defining where flood insurance is required and where it is not.
The Cautionary Tale of Corcoran, California
“Knowing if you’re upstream or downstream is very important” to understanding your flood risk, says Pho.
Corcoran, California, is a downstream town. Situated in a desert region plagued by drought, it occupied the dry bed of Tulare Lake, much of which had been empty for more than 100 years.
But the wet winter of 2023 brought storms ranging from bomb cyclones to atmospheric rivers. The storms refilled Tulare Lake in less than three weeks.
The weather also created a snowpack in the nearby Sierra Nevada mountains that was three times the average size. As the enormous snowpack began melting in the spring, the water ran downhill into Corcoran and other parts of the San Joaquin Valley. The flooding destroyed or damaged hundreds of homes and farm buildings; by some estimates, it has caused hundreds of millions of dollars’ worth of damage.
In Corcoran, which has a population of some 22,000 people, there are just four NFIP policies in place, according to FEMA records. In Kings County, where Corcoran is situated, 210 single-family homes have NFIP policies. Referring to FEMA’s flood risk categories, licensed State Farm insurance agent Rachel Silva says of Tulare, “The majority of our area is a preferred flood zone so homeowners don’t have to have [flood insurance].”
Cost can be an issue for some. In Corcoran, more than 28% of the population lives in poverty, and the average cost of NFIP flood insurance in California is $807 per year. “Unfortunately, many people here can’t afford it,” says Julie Chavez, a Farmers Insurance agent in Tulare.
FEMA recently revised its risk premiums, with changes in full effect as of April 2022. It projected that 77% of policyholders would see increases, with an average bump of $8 per month.
Here’s How To Buy Flood Insurance
You’re eligible to buy a government flood insurance policy if you live in one of the more than 22,000 communities that take part in the National Flood Insurance Program. To find out if your hometown is one of them, you can ask your insurance agent or look it up in the National Flood Insurance Program Community Status Book.
Note that you can’t purchase a policy directly from the NFIP. You’ll need to buy it through an insurance agent or company that participates in the NFIP.
For people who aren’t eligible to purchase NFIP insurance or find its premiums too expensive, private flood insurance is an increasingly available option. The Insurance Information Institute reports that as of 2022, 32% of flood insurance is handled by private underwriters such as Neptune, Chubb and AIG.
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