Flood insurance can be expensive and have major coverage limitations when disasters strike. But as climate change increases the frequency of extreme weather, it’s becoming essential coverage even for those who don’t live in traditional high-risk areas.
Recent disasters like Hurricane Helene, which severely flooded inland, mountainous parts of North Carolina, and catastrophic rainfall in central Vermont underscore the risks of flooding in areas far from the coasts. Last weekend, record-setting rain in Roswell, N.M., brought flash flooding that killed two people.
In the last 20 years, nearly every county in the US has experienced some degree of flooding, according to the Federal Emergency Management Agency, better known as FEMA. Conventional homeowners insurance offers little to no flood protection, and nationwide just 4% of households carry flood insurance.
That gap in insurance coverage can leave homeowners with catastrophic bills following an unexpected disaster.
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“A lot of people think that flood is a covered peril, be it within their homeowner’s policy or their renter’s policy,” said Mark Niess, vice president of private flood at insurer Wright Flood. “There is coverage for water, but there’s not necessarily coverage for flood.”
Flooding is frequently cited as the most expensive type of natural disaster — a single inch of water can cause $25,000 of property damage.
Most flood coverage is provided by the US government’s National Flood Insurance Program, after private insurers exited the market en masse nearly 100 years ago following catastrophic flooding of the Mississippi River.
Homeowners who sit in 100-year floodplains — areas deemed to have a 1% chance of flooding in a given year or a 30% chance over the life of a typical mortgage — are considered “high risk” and are required to have flood insurance if they have government-backed mortgages.
But more and more homes that don’t sit in floodplains are also at risk as the planet warms. Many of FEMA’s flood zone maps haven’t been updated in years, and even those that have been rely on historical storm data and don’t take into account how climate change and an atmosphere that holds more moisture will affect future flooding.
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Buncombe County, N.C., which was hit hard by flooding from Hurricane Helene, experienced more than 50 floods between 1996 and 2019, according to FEMA data. But few structures in the county were designated as being in a flood zone, and less than 1% of buildings were covered by NFIP policies.