Why You Need Flood Insurance

Maybe you don’t live in a flood plain. Maybe you think it’s already part of your homeowner’s insurance. Maybe you’re only renting. These are some of the reasons people have for not getting flood insurance on their property.

Billshark wants to correct these and other misconceptions about this necessary protection for your money.


  • According to the Federal Emergency Management Administration (FEMA), no home is completely safe from potential flooding.
  • Just one inch of water in a home can cost more than $25,000 in damages.
  • Homeowner’s and renter’s insurance does not typically cover flood damage.
  • More than 20 percent of flood claims come from properties outside high-risk flood zones.
  • Flood insurance can pay regardless of whether or not there is a Presidential Disaster Declaration.

And one final salient fact from FEMA:

Disaster assistance comes in two forms: a U.S. Small Business Administration loan, which must be paid back with interest, or a FEMA disaster grant, which is about $5,000 on average per household. By comparison, the average flood insurance claim is nearly $30,000 and does not have to be repaid.

FEMA also warns, “Flooding is the most common natural disaster in the United States, affecting every state. Flooding can be caused by dams or levees breaking, new development changing how water flows above and below ground, snowmelt, and much more.”

The “much more” also includes more intense hurricanes and heavier and more frequent rainfall, due to the increasing effects of climate change.

In May of 2018, the second of two “thousand-year floods” in just two years devastated the small town of Ellicott City, Maryland ... from a rainstorm.

In September 2017, rains from Hurricane Irma inundated St. Augustine, Florida, with flooding that officials called “historic.” The St. John’s River hit levels not seen since 1846.

And flooding in New Bern, North Carolina, in the aftermath of 2018’s Hurricane Florence reached levels—and devastated homes—at levels never seen there previously.

These are just three examples proving that catastrophic flooding events can occur anywhere, at any time, even in places that have never before experienced it.

What about the cost?

The cost of flood insurance is negligible unless you live in a high-flood-risk area, in which case your mortgage lender will likely require it.

Most people don’t realize their typical homeowner’s or renter’s policy does not include flood insurance. The average policy covers only flooding from a source within the home, such as a broken water pipe or water heater. They typically exclude “water incursions;” that is, water that originates from outside the house.

But is it worth it? The National Flood Insurance Program (NFIP), which is administered by FEMA, reports that the national average premium for flood insurance is $650. That can be a hefty amount for something you think you might never use.

But the purpose of insurance is to guard against financial disaster in case the unthinkable happens. Most people don’t expect their homes to catch fire, either, but sadly, it happens.

Keep in mind that the $650 figure is an average; your cost could be higher or lower, based on such factors as location, year of building construction, etc. If your insurance agent doesn’t offer flood insurance, check floodsmart.gov to see whether your community participates in the National Flood Insurance Program and whether you qualify for the agency’s lower-cost Preferred Risk Policy.

Also be sure to check out our new partner, Answer Financial, and Allstate agency, to help you save money on your home and auto insurance. Remember, this service is free to Billshark customers.

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