Flood Insurance

NATIONAL FLOOD INSURANCE PROGRAM

Flood damage is excluded under standard homeowners and renters insurance policies. However, flood coverage 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 up to $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 2016 poll by the Insurance Information Institute found that 12 percent of American homeowners had a flood insurance policy, lower than the 14 percent who had the coverage in 2015. The percentage of homeowners with flood insurance was highest in the South, at 14 percent. Thirteen percent of homeowners in the Northeast had a flood insurance policy, 10 percent of homeowners in the West had a flood insurance policy, while 8 percent of homeowners in the Midwest had flood insurance.

  • As of July 2016, 77 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.
  • In 2015, 86.5 percent of NFIP policies were held in the WYO program.
  • As of May 2016, 68 percent of policies covered single family homes, 21 percent covered condominiums, and 5 percent covered businesses and other non-residential properties. Two- to four-family units and other residential policies accounted for the remainder.
  • Superstorm Sandy which occurred in October 2012, resulted in $8.2 billion in NFIP payouts as of June 2016, second only to 2005’s Hurricane Katrina with $16.3 billion in payouts.
  • There were 130,214 NFIP claims from superstorm Sandy as of June 2016. The average paid loss was $63,352, compared with 167,984 claims from Katrina, with an average paid loss of $97,142.
  • In 2015 the average amount of flood coverage was $243,189, and the average premium was $663.
  • The average flood claim in 2015 was $39,184, down from $60,488 in 2012, the year of superstorm Sandy.
  • NFIP earned premiums fell slightly to $3.45 billion in 2015 from $3.54 billion in 2014.
  • As of the end of June the federal government had declared 17 major flood disasters in 2016, compared with 27 in all of 2015.

 

Superstorm Sandy was the second costliest U.S. flood, based on National Flood Insurance Program payouts as of June 2015. The figures below are preliminary, as claims are still being processed.

 

In 2015 and 2016 Texas, Louisiana, Mississippi, South Carolina and West Virginia have experienced devastating rainfall-induced flooding which resulted in billions of dollars in economic losses. In 2015, flash and river floods claimed 176 lives, up dramatically from 38 in 2014.

 

Top 10 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 167,985 $16,318 $97,140
2 Oct. 2012 Superstorm Sandy CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
130,352 8,309 63,745
3 Sep. 2008 Hurricane Ike AR, IL, IN, KY, LA, MO, OH, PA, TX 46,658 2,697 57,796
4 Sep. 2004 Hurricane Ivan AL, DE, FL, GA, LA, MD, MS, NJ, NY,
NC, OH, PA, TN, VA, WV
28,297 1,612 56,974
5 Aug. 2011 Hurricane Irene CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, PA, RI, VA, VT
44,271 1,340 30,278
6 Jun. 2001 Tropical Storm Allison FL, LA, MS, NJ, PA, TX 30,671 1,105 36,028
7 May 1995 Louisiana Flood LA 31,343 585 18,667
8 Aug. 2012 Tropical Storm Isaac AL, FL, LA, MS 12,041 555 46,073
9 Sep. 2003 Hurricane Isabel DE, MD, NJ, NY, NC, PA, VA, WV 19,938 500 25,091
10 Sep. 2005 Hurricane Rita AL, AR, FL, LA, MS, TN, TX 9,529 475 49,821

(1) Includes events from 1978 to June 30, 2016, as of September 9, 2016. Defined by the National Flood Insurance Program as an event that produces at least 1,500 paid losses.
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, 2005 AND 2014

  Louisiana Mississippi Alabama
2014 472,542 70,635 56,393
2005 388,121 45,563 45,139

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 Alabama, Louisiana and Mississippi after 2005’s Hurricane Katrina.

 

National Flood Insurance Program, 1980-2015

    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 4,962,011 213,587 17,770,118
2007 5,655,919 23,189 614,014
2008 5,684,275 74,907 3,487,967
2009 5,700,235 31,033 779,898
2010 5,645,436 29,155 773,575
2011 5,646,144 78,183 2,427,274
2012 5,620,017 150,832 9,266,395
2013 5,568,642 18,101 491,415
2014 5,406,725 12,887 376,648
2015 5,206,241 20,208 791,837

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

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  • There were 129,360 NFIP claims from superstorm Sandy as of October 2015. The average paid loss was $61,809, compared with 167,970 claims from Katrina, with an average paid loss of $97,140.
  • In 2015 the average amount of flood coverage was $243,189, and the average premium was $663.
  • The average flood claim in 2015 was $39,184, down from $61,435 in 2012, the year of superstorm Sandy.
  • NFIP earned premiums dropped to $3.45 billion in 2015 from $3.54 billion in 2014.
  • As of August 2016 the federal government had declared 20 major flood disasters for 2016, compared with 27 in all of 2015.  

 

Flood Insurance In The United States, 2015 (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 10,645 $2,141.1 44,619 $10,145.6 55,264 $12,286.7
Alaska 762 168.3 2,033 548.2 2,795 716.5
Arizona 6,416 1,479.3 29,286 7,070.7 35,702 8,550.0
Arkansas 3,468 525.9 15,225 2,570.9 18,693 3,096.8
California 47,099 12,730.0 238,038 66,521.0 285,137 79,251.1
Colorado 4,379 1,011.0 18,888 4,635.6 23,267 5,646.7
Connecticut 2,649 612.8 38,011 9,560.3 40,660 10,173.1
Delaware 4,674 1,231.6 22,169 5,619.8 26,843 6,851.3
D.C. 106 27.7 2,039 444.4 2,145 472.1
Florida 139,718 36,132.2 1,682,198 400,138.6 1,821,916 436,270.8
Georgia 17,484 4,278.5 71,251 18,358.9 88,735 22,637.3
Hawaii 2,546 574.8 57,416 12,742.8 59,962 13,317.6
Idaho 1,097 247.3 5,096 1,202.8 6,193 1,450.0
Illinois 12,269 2,126.3 33,302 6,454.1 45,571 8,580.4
Indiana 6,246 983.1 20,291 3,994.7 26,537 4,977.8
Iowa 2,804 436.1 11,564 2,313.2 14,368 2,749.3
Kansas 2,568 405.9 8,643 1,582.4 11,211 1,988.3
Kentucky 3,853 535.8 18,945 3,137.5 22,798 3,673.3
Louisiana 118,622 28,635.0 334,201 82,497.7 452,823 111,132.7
Maine 654 132.9 8,081 1,880.5 8,735 2,013.4
Maryland 7,006 1,674.1 62,034 14,092.7 69,040 15,766.8
Massachusetts 5,156 1,147.8 58,558 14,664.4 63,714 15,812.2
Michigan 4,745 691.9 18,717 3,542.2 23,462 4,234.2
Minnesota 1,877 400.9 8,654 1,965.7 10,531 2,366.6
Mississippi 14,844 3,460.2 51,598 12,165.7 66,442 15,625.8
Missouri 4,294 687.7 18,641 3,488.7 22,935 4,176.4
Montana 880 170.1 4,340 868.5 5,220 1,038.6
Nebraska 2,426 380.1 8,579 1,623.4 11,005 2,003.5
Nevada 2,342 533.5 10,572 2,768.8 12,914 3,302.3
New Hampshire 644 132.1 8,218 1,778.0 8,862 1,910.1
New Jersey 18,246 4,021.9 215,534 53,049.4 233,780 57,071.3
New Mexico 2,444 451.4 11,938 2,407.1 14,382 2,858.5
New York 20,998 5,227.3 167,204 44,945.4 188,202 50,172.7
North Carolina 15,143 3,730.9 114,864 27,914.4 130,007 31,645.3
North Dakota 2,021 528.4 10,234 2,714.5 12,255 3,242.9
Ohio 7,623 1,107.3 30,744 5,665.4 38,367 6,772.7
Oklahoma 3,669 651.2 12,124 2,448.3 15,793 3,099.6
Oregon 6,573 1,528.3 24,191 5,827.8 30,764 7,356.1
Pennsylvania 10,136 1,639.2 55,270 11,393.4 65,406 13,032.6
Rhode Island 591 144.4 14,512 3,731.4 15,103 3,875.8
South Carolina 24,133 6,548.6 175,949 44,510.7 200,082 51,059.3
South Dakota 952 201.4 3,862 886.5 4,814 1,087.9
Tennessee 5,560 1,254.5 24,782 5,732.6 30,342 6,987.1
Texas 105,268 28,419.4 482,424 127,454.0 587,692 155,873.4
Utah 669 147.6 3,317 827.7 3,986 975.3
Vermont 365 65.2 3,731 827.4 4,096 892.6
Virginia 17,375 4,300.7 87,697 22,247.2 105,072 26,547.9
Washington 6,178 1,385.1 33,694 8,298.4 39,872 9,683.5
West Virginia 4,646 549.6 13,181 1,966.6 17,827 2,516.2
Wisconsin 2,038 332.7 12,004 2,317.4 14,042 2,650.1
Wyoming 408 90.7 1,613 388.1 2,021 478.8
American Samoa 0 0.0 0 0.0 0 0.0
Guam 159 31.1 72 14.8 231 45.9
N. Mariana Islands 5 0.4 10 1.8 15 2.1
Puerto Rico 118 15.3 9,497 1,353.9 9,615 1,369.3
Virgin Islands 279 52.2 1,342 262.2 1,621 314.4
United States (3) 687,870 $166,118.7 4,421,000 $1,075,564.7 5,108,870 $1,241,683.4

(1) Direct and Write Your Own (WYO) business may not add to total due to rounding.
(2) Total limits of liability for all policies in force.
(3) Includes WYO policies written in unknown areas.

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

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FLOOD INSURANCE POLICIES IN FORCE BY OCCUPANCY TYPE, 2016 (1)

(1) As of March 28, 2016.

Source: Federal Emergency Management Agency (FEMA).

View Archived Graphs

 

 

NATIONAL FLOOD INSURANCE PROGRAM PAYOUTS, 2015 (1)

 

State name Total number
of claims
Total claim payments
($ millions)
Alabama 127 $2.04
Alaska 5 0.02
Arizona 41 0.24
Arkansas 183 4.79
California 404 6.98
Colorado 311 1.84
Connecticut 17 0.05
Delaware 10 0.01
D.C. 16 0.01
Florida 1,765 22.15
Georgia 147 0.96
Hawaii 37 0.87
Idaho 9 0.03
Illinois 706 7.67
Indiana 523 7.98
Iowa 97 2.44
Kansas 94 0.47
Kentucky 1,245 25.21
Louisiana 563 10.18
Maine 13 0.11
Maryland 127 0.47
Massachusetts 560 10.11
Michigan 88 0.37
Minnesota 21 0.03
Mississippi 125 1.85
Missouri 527 9.21
Montana 8 0.04
Nebraska 268 3.92
Nevada 27 0.25
New Hampshire 14 0.03
New Jersey 207 1.30
New Mexico 29 0.33
New York 375 2.40
North Carolina 239 1.83
North Dakota 9 0.04
Ohio 524 7.53
Oklahoma 663 22.96
Oregon 32 0.14
Pennsylvania 243 2.48
Rhode Island 23 0.02
South Carolina 194 3.71
South Dakota 53 2.06
Tennessee 85 1.06
Texas 9,949 468.46
Utah 21 0.03
Vermont 33 0.29
Virginia 228 2.23
Washington 386 7.04
West Virginia 230 3.40
Wisconsin 29 0.13
Wyoming 27 0.75
Guam 0 0.00
Puerto Rico 7 0.05
Virgin Islands 5 0.09
Total U.S. 21,669 $648.64

(1) October 1, 2014 through September 30, 2015.

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

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  • NFIP flood insurance payouts were highest in Texas in 2015, followed by Kentucky, Oklahoma, Florida and Louisiana.  Massachusetts, Missouri, Indiana, Illinois and Ohio round out the top ten.