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 2015 poll by the Insurance Information Institute found that 14 percent of American homeowners had a flood insurance policy. This percentage has been at about the same level every year since 2009. The percentage of homeowners with flood insurance was highest in the South, at 21 percent, compared with 20 percent in 2014. Eleven percent of homeowners in the Northeast had a flood insurance policy, which is unchanged from 2014. Nine percent of homeowners in the West had a flood insurance policy, compared with 8 percent in 2014, while 10 percent of homeowners in the Midwest had flood insurance, compared with 7 percent in 2014.

  • As August 2015, 78 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 July 2015, 68 percent of policies covered single family homes, 21 percent covered condominiums and 6 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 $7.9 billion in NFIP payouts as of March 2015, second only to 2005’s Hurricane Katrina with $16.3 billion in payouts.

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.

 

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 167,968 $16,315 $97,133
2 Oct. 2012 Superstorm Sandy CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
129,090 7,915 61,310
3 Sep. 2008 Hurricane Ike AR, IL, IN, KY, LA, MO, OH, PA, TX 46,586 2,688 57,707
4 Sep. 2004 Hurricane Ivan AL, DE, FL, GA, LA, MD, MS, NJ, NY, NC, OH, PA, TN, VA, WV 28,289 1,611 56,959
5 Aug. 2011 Hurricane Irene CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, PA, RI, VA, VT
44,228 1,337 30,226
6 Jun. 2001 Tropical Storm Allison FL, LA, MS, NJ, PA, TX 30,784 1,107 35,955
7 May 1995 Louisiana Flood LA 31,343 585 18,667
8 Aug. 2012 Tropical Storm Isaac AL, FL, LA, MS 11,993 548 45,704
9 Sep. 2003 Hurricane Isabel DE, MD, NJ, NY, NC, PA, VA, WV 19,930 500 25,068
10 Sep. 2005 Hurricane Rita AL, AR, FL, LA, MS, TN, TX 9,526 474 49,811

(1) Includes events from 1978 to April 30, 2015, as of June 22, 2015. 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, 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, 1980-2014

    Losses paid
Year Policies in force
at the end of year
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 4,962,011 213,515 17,768,904
2007 5,655,919 23,183 614,007
2008 5,684,275 74,852 3,487,554
2009 5,700,235 31,027 780,115
2010 5,645,436 29,152 774,689
2011 5,646,144 78,057 2,427,308
2012 5,620,017 149,808 9,061,580
2013 5,568,642 18,046 488,815
2014 5,350,887 12,105 351,446

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

View Archived Tables

  • There were 128,830 NFIP claims from superstorm Sandy as of March 2015. The average paid loss was $61,089, compared with 167,940 claims from Katrina, with an average paid loss of $97,126.
  • In 2014 the average amount of flood coverage was $241,736, and the average premium was $665.
  • The average flood claim in 2014 was $29,033, down from $60,488 in 2012, the year of superstorm Sandy.
  • NFIP earned premiums rose slightly to $3.56 billion in 2014 from $3.51 billion in 2013.
  • As of early August the federal government had declared 20 major flood disasters in 2015, compared with 30 in all of 2014.

 

FLOOD INSURANCE IN THE UNITED STATES, 2014 (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 10,964 $2,185.3 45,429 $10,410.0 56,393 $12,595.3
Alaska 794 171.7 2,220 580.8 3,014 752.5
Arizona 6,650 1,505.2 29,639 7,046.0 36,289 8,551.2
Arkansas 3,730 550.6 16,251 2,652.0 19,981 3,202.6
California 39,609 10,149.8 194,699 53,352.4 234,308 63,502.3
Colorado 4,757 1,106.0 18,887 4,743.2 23,644 5,849.3
Connecticut 2,913 649.7 38,941 9,825.6 41,854 10,475.3
Delaware 5,012 1,308.6 20,023 5,394.9 25,035 6,703.6
D.C. 97 25.9 2,338 438.6 2,435 464.5
Florida 163,567 41,853.7 1,783,937 425,872.4 1,947,504 467,726.1
Georgia 18,494 4,457.0 74,251 18,913.4 92,745 23,370.4
Hawaii 2,540 563.5 58,116 12,651.4 60,656 13,214.9
Idaho 1,204 271.0 5,365 1,241.0 6,569 1,512.0
Illinois 12,859 2,204.2 34,246 6,706.7 47,105 8,910.9
Indiana 6,797 1,055.4 21,179 4,026.3 27,976 5,081.7
Iowa 3,065 465.3 12,576 2,422.6 15,641 2,887.9
Kansas 2,879 444.0 9,221 1,631.7 12,100 2,075.8
Kentucky 3,912 548.3 19,572 3,137.6 23,484 3,685.9
Louisiana 127,531 30,062.3 345,011 83,712.7 472,542 113,775.0
Maine 699 139.2 8,479 1,942.2 9,178 2,081.4
Maryland 7,583 1,803.6 64,702 14,569.0 72,285 16,372.6
Massachusetts 5,646 1,242.3 53,505 14,429.4 59,151 15,671.7
Michigan 4,897 727.1 19,726 3,638.3 24,623 4,365.4
Minnesota 2,145 452.9 9,845 2,179.8 11,990 2,632.7
Mississippi 16,514 3,764.6 54,121 12,456.4 70,635 16,220.9
Missouri 4,681 730.7 19,850 3,582.0 24,531 4,312.7
Montana 1,044 199.4 5,070 1,004.2 6,114 1,203.6
Nebraska 2,642 386.6 9,277 1,687.8 11,919 2,074.4
Nevada 2,433 546.8 10,885 2,793.4 13,318 3,340.1
New Hampshire 683 139.2 8,356 1,801.3 9,039 1,940.5
New Jersey 22,333 4,319.5 215,025 53,344.0 237,358 57,663.5
New Mexico 2,602 464.7 12,645 2,492.2 15,247 2,957.0
New York 26,773 5,642.4 162,099 45,052.0 188,872 50,694.4
North Carolina 16,024 3,910.3 119,487 28,737.5 135,511 32,647.8
North Dakota 2,168 552.7 10,110 2,608.1 12,278 3,160.8
Ohio 8,127 1,155.8 31,911 5,732.7 40,038 6,888.4
Oklahoma 3,782 662.5 12,740 2,484.4 16,522 3,146.9
Oregon 6,966 1,587.7 25,055 5,945.1 32,021 7,532.8
Pennsylvania 10,786 1,712.2 58,476 11,797.8 69,262 13,509.9
Rhode Island 612 145.7 14,884 3,896.9 15,496 4,042.6
South Carolina 25,622 6,893.4 164,848 44,629.5 190,470 51,522.9
South Dakota 1,037 211.6 4,212 938.6 5,249 1,150.2
Tennessee 5,920 1,328.3 25,356 5,930.4 31,276 7,258.7
Texas 111,070 29,459.2 489,540 127,863.4 600,610 157,322.6
Utah 718 158.8 3,525 867.2 4,243 1,026.1
Vermont 378 65.8 3,937 854.3 4,315 920.1
Virginia 19,040 4,657.3 93,116 23,382.9 112,156 28,040.2
Washington 6,669 1,457.0 35,941 8,716.2 42,610 10,173.2
West Virginia 5,120 575.0 14,315 2,059.6 19,435 2,634.6
Wisconsin 2,276 359.2 13,107 2,461.1 15,383 2,820.4
Wyoming 464 101.0 1,839 430.6 2,303 531.7
American Samoa 1 0.0 0 0.0 1 0.0
Guam 168 31.0 68 15.5 236 46.5
N Mariana Islands 5 0.4 2 1.0 7 1.4
Puerto Rico 145 16.5 13,464 1,856.2 13,609 1,872.7
Virgin Islands 295 55.1 1,417 266.1 1,712 321.2
United States 745,442 $175,233.2 4,522,836 $1,097,206.2 5,268,278 $1,272,439.4

(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).

View Archived Graphs

 

 

NATIONAL FLOOD INSURANCE PROGRAM PAYOUTS, 2014 (1)

 

State name Total number
of claims
Total claim payments
($ millions)
Alabama 1,365 $51.81
Alaska 23 0.24
Arizona 256 3.49
Arkansas 175 2.66
California 226 3.29
Colorado 91 0.36
Connecticut 71 0.45
Delaware 53 0.65
D.C. 21 0.03
Florida 3,823 115.84
Georgia 155 0.90
Hawaii 69 1.02
Idaho 17 0.03
Illinois 610 4.39
Indiana 295 4.10
Iowa 552 7.48
Kansas 25 0.18
Kentucky 375 6.79
Louisiana 728 14.73
Maine 38 0.64
Maryland 434 6.93
Massachusetts 122 1.17
Michigan 635 6.98
Minnesota 273 2.30
Mississippi 304 4.43
Missouri 271 3.00
Montana 37 0.43
Nebraska 53 0.13
Nevada 64 0.58
New Hampshire 27 0.21
New Jersey 652 6.42
New Mexico 49 0.65
New York 1,401 13.06
North Carolina 560 4.65
North Dakota 42 0.17
Ohio 736 14.74
Oklahoma 29 0.63
Oregon 24 0.37
Pennsylvania 785 14.36
Rhode Island 39 0.14
South Carolina 128 1.10
South Dakota 59 1.28
Tennessee 196 4.32
Texas 1,975 58.52
Utah 13 0.14
Vermont 26 0.15
Virginia 447 2.68
Washington 69 3.11
West Virginia 82 0.60
Wisconsin 59 0.50
Wyoming 11 0.07
Guam 2 0.03
Puerto Rico 33 0.08
Virgin Islands 4 0.29
Total U.S. 18,609 $373.31

(1) October 1, 2013 through September 30, 2014.

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

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  • NFIP flood insurance payouts were highest in Florida in 2014, followed by Texas, Alabama, Ohio and Louisiana.  Pennsylvania, New York, Iowa, Michigan and Maryland round out the top ten.

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