Flood Insurance

NATIONAL FLOOD INSURANCE PROGRAM

Flood damage is excluded under standard homeowners and renters insurance policies. Flood coverage, however, is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers. 

Congress created the NFIP in 1968 in response to the rising cost of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. The NFIP makes federally backed flood insurance available in communities that agree to adopt and enforce floodplain management ordinances to reduce future flood damage. The NFIP is self-supporting for the average historical loss year. This means that unless there is a widespread disaster, operating expenses and flood insurance claims are financed through premiums collected.

The NFIP provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. Private flood insurance is available for those who need additional insurance protection, known as "excess coverage,” over and above the basic policy or for people whose communities do not participate in the NFIP. Some insurers have introduced special policies for high-value properties. These policies may cover homes in noncoastal areas and/or provide enhancements to traditional flood coverage. The comprehensive portion of an auto insurance policy includes coverage for flood damage.

A 2014 poll by the Insurance Information Institute found that 13 percent of American homeowners had a flood insurance policy. This percentage has been at about the same level for the six years since 2009. The percentage of homeowners with flood insurance was highest in the South, at 20 percent, up from 15 percent in 2013. Eleven percent of homeowners in the Northeast had a flood insurance policy, compared with 10 percent in 2013. Eight percent of homeowners in the West had a flood insurance policy, down from 11 percent in 2013, while 7 percent of homeowners in the Midwest had flood insurance, compared with 12 percent in 2013.

  • As of November 2014, 81 insurance companies participated in the "Write-Your-Own" program, started in 1983, in which insurers issue policies and adjust flood claims on behalf of the federal government under their own names.
  • As of October 2014, 69 percent of NFIP flood insurance policies covered single family homes, 20 percent covered condominiums and 5 percent covered businesses and other non-residential properties. 2 to 4 family units and other residential policies accounted for the remainder.
  • Superstorm Sandy, which occurred in October 2012, resulted in $7.8 billion in NFIP payouts as of August 2014, second only to 2005’s Hurricane Katrina with $16.3 billion in payouts.

Hurricane Sandy was the second costliest U.S. flood, based on National Flood Insurance Program payouts as of November 2014. The figures below are preliminary, as claims are still being processed.

 

THE TEN MOST SIGNIFICANT FLOOD EVENTS BY NATIONAL FLOOD INSURANCE PROGRAM PAYOUTS (1)

Rank Date Event Location Number of
paid losses
Amount paid
($ millions)
Average
paid loss
1 Aug. 2005 Hurricane Katrina AL, FL, GA, LA, MS, TN 167,805 $16,294 $97,100
2 Oct. 2012 Superstorm Sandy CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
128,186 7,753 60,484
3 Sep. 2008 Hurricane Ike AR, IL, IN, KY, LA, MO, OH, PA, TX 46,522 2,679 57,581
4 Sep. 2004 Hurricane Ivan AL, DE, FL, GA, LA, MD, MS, NJ, NY,
NC, OH, PA, TN, VA, WV
28,264 1,608 56,897
5 Aug. 2011 Hurricane Irene CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, PA, RI, VA, VT
44,147 1,330 30,126
6 Jun. 2001 Tropical Storm Allison FL, LA, MS, NJ, PA, TX 30,778 1,106 35,931
7 May 1995 Louisiana Flood LA 31,343 585 18,667
8 Aug. 2012 Tropical Storm Isaac AL, FL, LA, MS 11,966 543 45,408
9 Sep. 2003 Hurricane Isabel DE, MD, NJ, NY, NC, PA, VA, WV 19,868 493 24,833
10 Sep. 2005 Hurricane Rita AL, AR, FL, LA, MS, TN, TX 9,519 474 49,765

(1) Includes events from 1978 to August 31, 2014, as of November 3, 2014. Stated in dollars when occurred.

Source: U.S. Department of Homeland Security, Federal Emergency Management Agency; U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Hurricane Center.

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HURRICANE-RELATED FLOODING

A 2013 study of coastal areas by CoreLogic found that 4.2 million homes, with $1.1 trillion in total property exposure, are at risk of damage caused by hurricane storm surge flooding. In the Atlantic Coast region alone, there are approximately 2.4 million homes at risk, valued at more than $793 billion. Total exposure along the Gulf Coast is $354 billion, with 1.8 million homes at risk for potential storm-surge damage. Standard homeowners insurance does not cover property damage from storm surge. However, such coverage is available through the National Flood Insurance Program (NFIP) and some private insurers.

 

TOTAL POTENTIAL RESIDENTIAL EXPOSURE TO HURRICANE STORM-SURGE DAMAGE IN COASTAL STATES, 2013 (1)

Rank (2) State Total exposure
to damage
($ billions)
Number
of homes
1 Florida $386.5 1,478,858
2 New York 135.0 270,458
3 New Jersey 118.8 350,577
4 Virginia 78.0 329,234
5 Louisiana 72.0 411,052
6 South Carolina 65.6 196,784
7 North Carolina 65.2 232,212
8 Texas 50.9 369,071
9 Massachusetts 50.3 107,657
10 Connecticut 35.0 53,614
11 Maryland 22.4 75,262
12 Georgia 20.5 118,004
13 Delaware 15.9 42,178
14 Mississippi 10.3 78,992
15 Rhode Island 7.2 16,722
16 Alabama 4.7 34,854
17 Maine 3.1 10,535
18 New Hampshire 2.7 5,854
19 Pennsylvania 2.6 20,198
20 D.C. 0.1 247
  United States
$1,146.9 4,202,363

(1) Exposure to potential hurricane-driven storm-surge damage to single family homes in states along the Atlantic and Gulf coasts. Based on estimated property values as of April 2013, as calculated by CoreLogic. Results are not comparable to previous years, as CoreLogic’s methodology has changed.
(2) Ranked on dollar value of exposure to damage.

Source: CoreLogic (www.corelogic.com).

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  • Residential properties in Florida have the most exposure to hurricane storm surge damage, followed by New York, New Jersey, Virginia and Louisiana, according to CoreLogic.
  • Among the most densely populated metropolitan areas, the New York City metro area, which includes Long Island and the New Jersey coast, has the highest exposure to potential storm surge damage ($206 billion). The next four areas in terms of exposure were Miami ($100 billion), Virginia Beach ($73 billion), Tampa ($55 billion) and New Orleans ($43 billion).

 

FLOOD INSURANCE POLICIES IN FORCE, SELECTED GULF STATES, 2003-2013

Year Louisiana Mississippi Alabama
2013 481,354 73,707 57,724
2006 494,370 76,215 52,308
2003 379,361 42,149 40,343

Source: U.S. Department of Homeland Security, FEMA; Insurance Information Institute Fact Books.

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  • The number of flood insurance policies increased in Louisiana and Mississippi after 2005’s Hurricane Katrina, but then declined in subsequent years.
  • The number of flood insurance policies rose in Alabama post-Katrina, and continued to rise over the following years.

 

NATIONAL FLOOD INSURANCE PROGRAM, 1980-2013

    Losses paid
Year Policies in force
at year-end
Number Amount ($000)
1980 2,103,851 41,918 $230,414
1985 2,016,785 38,676 368,239
1990 2,477,861 14,766 167,897
1995 3,476,829 62,441 1,295,578
2000 4,369,087 16,362 251,721
2005 4,962,011 213,290 17,763,189
2006 5,514,895 24,620 641,187
2007 5,655,919 23,169 613,942
2008 5,684,275 74,727 3,485,640
2009 5,700,235 30,996 779,855
2010 5,645,436 29,111 773,526
2011 5,646,144 77,801 2,419,357
2012 5,620,017 148,448 8,786,455
2013 5,580,075 16,864 441,421

Source: U.S. Department of Homeland Security, Federal Emergency Management Agency.

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  • There were 128,186 NFIP claims from superstorm Sandy as of August 2014. The average paid loss was $60,484, compared with 167,805 claims from Katrina, with an average paid loss of $97,100.
  • In 2013, the average amount of flood coverage was $233,237 and the average premium was $632.
  • The average flood claim in 2013 was $26,165, down from $59,189 in 2012, the year of superstorm Sandy.
  • NFIP premiums written rose slightly from $3.3 billion in 2012 to $3.5 billion in 2013.
  • As of early November, the federal government had declared 26 major flood disasters in 2014, compared with 42 in all of 2013.

 

FLOOD INSURANCE IN THE UNITED STATES, 2013 (1)

  Direct NFIP business WYO business Total NFIP/WYO
State Number of
policies
Insurance
in force (2)
($ millions)
Number of
policies
Insurance
in force (2)
($ millions)
Number of
policies
Insurance
in force (2)
($ millions)
Alabama 11,130 $2,182.8 46,594 $10,189.8 57,724 $12,372.6
Alaska 792 176.5 2,271 576.9 3,063 753.4
Arizona 6,504 1,441.6 28,291 6,562.4 34,795 8,004.0
Arkansas 3,979 552.5 16,839 2,630.8 20,818 3,183.3
California 42,225 10,651.9 204,053 54,490.5 246,278 65,142.5
Colorado 4,471 1,020.9 18,516 4,261.7 22,987 5,282.6
Connecticut 3,071 659.2 39,691 9,701.5 42,762 10,360.6
Delaware 5,091 1,300.8 21,116 5,268.8 26,207 6,569.6
D.C. 88 23.8 2,245 382.8 2,333 406.6
Florida 182,359 46,017.3 1,855,348 431,028.3 2,037,707 477,045.6
Georgia 19,239 4,600.4 76,762 19,074.6 96,001 23,675.0
Hawaii 2,547 559.0 57,136 12,171.9 59,683 12,730.9
Idaho 1,300 286.5 5,562 1,256.4 6,862 1,542.9
Illinois 13,521 2,239.5 35,428 6,564.0 48,949 8,803.5
Indiana 7,322 1,112.6 21,728 3,974.3 29,050 5,086.9
Iowa 3,230 471.1 12,953 2,431.0 16,183 2,902.1
Kansas 3,028 460.0 9,599 1,627.9 12,627 2,087.8
Kentucky 4,225 573.6 20,392 3,120.6 24,617 3,694.2
Louisiana 133,122 30,733.8 348,232 82,842.6 481,354 113,576.4
Maine 744 145.1 8,490 1,887.9 9,234 2,033.0
Maryland 8,066 1,871.2 65,531 14,398.9 73,597 16,270.1
Massachusetts 6,096 1,305.9 52,548 12,749.4 58,644 14,055.3
Michigan 5,234 772.8 19,438 3,479.0 24,672 4,251.8
Minnesota 2,199 454.2 9,779 2,112.1 11,978 2,566.3
Mississippi 17,802 3,940.9 55,905 12,497.6 73,707 16,438.5
Missouri 5,101 770.5 20,667 3,587.6 25,768 4,358.1
Montana 1,024 187.1 4,764 875.5 5,788 1,062.6
Nebraska 2,819 403.4 9,620 1,681.1 12,439 2,084.5
Nevada 2,527 562.9 12,260 2,870.6 14,787 3,433.4
New Hampshire 722 146.3 8,738 1,800.2 9,460 1,946.5
New Jersey 23,732 4,460.3 219,917 52,881.0 243,649 57,341.3
New Mexico 2,722 475.5 13,263 2,524.1 15,985 2,999.6
New York 27,949 5,763.7 167,164 43,438.8 195,113 49,202.5
North Carolina 16,949 4,028.9 121,732 28,798.7 138,681 32,827.6
North Dakota 2,509 608.5 11,250 2,792.6 13,759 3,401.1
Ohio 8,458 1,179.9 32,444 5,601.2 40,902 6,781.1
Oklahoma 3,998 667.3 13,539 2,521.5 17,537 3,188.8
Oregon 7,386 1,654.1 26,161 6,046.3 33,547 7,700.4
Pennsylvania 12,635 1,804.0 60,453 11,779.0 73,088 13,583.0
Rhode Island 659 154.5 15,280 3,801.8 15,939 3,956.2
South Carolina 26,878 7,137.9 178,032 43,716.4 204,910 50,854.3
South Dakota 1,095 209.8 4,306 922.9 5,401 1,132.7
Tennessee 6,297 1,373.8 26,033 5,889.9 32,330 7,263.7
Texas 120,495 31,095.7 506,658 129,156.2 627,153 160,251.9
Utah 767 162.9 3,710 868.5 4,477 1,031.4
Vermont 518 70.4 4,002 846.7 4,520 917.1
Virginia 19,960 4,800.7 94,920 23,378.1 114,880 28,178.8
Washington 6,940 1,504.4 37,162 8,875.1 44,102 10,379.5
West Virginia 5,512 605.3 15,106 2,092.1 20,618 2,697.4
Wisconsin 2,418 374.9 13,436 2,444.7 15,854 2,819.6
Wyoming 516 103.7 1,959 429.2 2,475 532.9
Guam 182 33.0 80 16.8 262 49.8
N. Mariana Islands 10 0.4 1 1.0 11 1.4
Puerto Rico 738 36.0 39,083 3,603.8 39,821 3,639.8
Virgin Islands 306 57.1 1,757 301.9 2,063 359.0
United States  799,207 $183,986.6 4,697,944 $1,098,824.8 5,497,151 $1,282,811.4

(1) Direct and WYO business may not add to total due to rounding.
(2) Total limits of liability for all policies in force.

Source: U.S. Department of Homeland Security, Federal Emergency Management Agency.

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FLOOD INSURANCE POLICIES IN FORCE BY OCCUPANCY TYPE, 2014 (1)

(1) As of October 2014.

Source: Federal Emergency Management Agency (FEMA).

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NATIONAL FLOOD INSURANCE PROGRAM PAYOUTS, 2013 (1)

 

State name Total number
of claims
Total claim payments
($ millions)
Alabama  185 $2.22
Alaska 43 2.78
Arizona 54 0.55
Arkansas 114 2.10
California 272 3.20
Colorado 2,020 4.62
Connecticut 6,258 244.26
Delaware 1,560 17.07
D.C. 13 0.01
Florida 2,284 28.45
Georgia 457 4.60
Hawaii 13 0.00
Idaho 11 0.01
Illinois 4,352 88.54
Indiana 681 16.11
Iowa 439 3.56
Kansas 107 1.15
Kentucky 109 1.82
Louisiana 1,194 15.64
Maine 44 0.48
Maryland 1,740 20.79
Massachusetts 1,016 19.57
Michigan 481 8.23
Minnesota 91 0.49
Mississippi 479 8.65
Missouri 907 15.41
Montana 22 0.05
Nebraska 14 0.11
Nevada 39 0.12
New Hampshire 43 0.29
New Jersey 75,300 3,780.20
New Mexico 91 0.55
New York 58,300 3,767.37
North Carolina 1,247 20.51
North Dakota 165 0.68
Ohio 528 8.06
Oklahoma 345 7.60
Oregon 50 0.80
Pennsylvania 836 9.37
Rhode Island 1,101 35.85
South Carolina 275 2.67
South Dakota 13 0.20
Tennessee 521 7.50
Texas 890 14.58
Utah 17 0.03
Vermont 39 0.27
Virginia 1,300 16.33
Washington 152 2.62
West Virginia 127 1.55
Wisconsin 127 1.05
Wyoming 9 0.01
Guam 1 0.00
Puerto Rico 291 1.81
Virgin Islands 5 0.13
Total U.S. 166,772 $8,190.61

(1) October 1, 2012 through September 30, 2013.

Source: U.S. Department of Homeland Security, Federal Emergency Management Agency.

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  • NFIP flood insurance payouts were highest in New Jersey in 2013, followed by New York, Connecticut, Illinois and Rhode Island. Florida, Maryland, North Carolina, Massachusetts and Delaware round out the top ten.

 

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