How to Get the Best Flood Insurance

How to Get the Best Flood Insurance

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If you live near a body of water and finance your home, you are probably required to have flood insurance. But with rising sea levels, even homeowners in moderately risky flood zones should consider getting flood insurance. Finding the right policy is not always straightforward. In this piece we detail how you can get the best flood insurance policy for yourself.

Who Has the Best Flood Insurance?

Most flood insurance policies in the United States are managed by the Federal Emergency Management Administration (FEMA) as part of the National Flood Insurance Program (NFIP), and sold by private insurers.

This means that if you buy an NFIP-backed flood insurance policy, your annual premiums and coverage levels will be the same regardless of the company you buy it from.

The best flood insurance comes down to customer service and coverage limits.

Best flood insurance company based on customer service

We recommend Amica, USAA, and Encompass as three top flood insurers based on the high ratings they received from customers in the 2016 J.D. Power study of homeowners insurance companies.

This is especially important because of the nature of flood insurance claims. Most claims are filed after major large-scale floods, and insurers only have a finite amount of adjusters. Having an insurer with a strong record for keeping their clients happy and informed can go a long way in reducing the stress of dealing with a flood. Amica, USAA and Encompass score in the top three for their handling of clients and their home claims, which we expect to be the same for their flood claims.

USAA is only available to those who qualify - military members and their direct family. The company is generally rated well across most of their insurance products. Amica and Encompass are open to anyone, but they do not operate in every state. If they are not available, Liberty Mutual is a third best option from the top companies you will likely be able to find in your area.

Best flood insurance for coverage

If you want higher limits than what is available in the standard NFIP-backed policies, private insurance companies are better options for the best flood insurance coverage. NFIP claims are usually capped at $250,000, with only homes in the highest risk categories getting access to higher limits. They also don't cover additional living expenses should you be displaced in a flood. If you live in a lower risk area and want higher limits you will need to go through a private flood insurance company--although there are not many around.

Currently your best bet for private flood insurance is the Flood Insurance Agency. The Flood Insurance Agency is backed by Lloyd's of London, among others, and offers policies in all 50 states. If you live in California and Florida, you have a few more options, including:

Choosing private vs. NFIP flood insurance

Here is a quick summary of the pros and cons to going with a private insurer:

Benefits of Private Flood Insurance
Drawbacks of Private Flood Insurance
Coverage limits past $250,000 for home and $100,000 for possessionsThere's a possibility you may be dropped after a claim
Shorter waiting period (14 days vs 30 days)Higher premium if you go back to NFIP
Less worry of insolvency or instabilityMay not satisfy home loan flood insurance requirements

Another thing to be aware of is that unlike NFIP policies, private flood insurers are permitted to end your policy if your flood risk becomes too great. In addition, your home loan provider, especially if it's a federal loan, may not recognize your policy with a private company.

How do you buy flood insurance?

You can buy flood insurance by speaking with and getting a quote from a flood insurance agent who can write policies from the NFIP. You won't be able to buy flood insurance online as you would car or homeowners insurance. For private flood insurance, the Flood Insurance Agency provides estimated quotes on their website, but you will have to submit a separate application to actually purchase a policy.

There are currently 79 insurers in partnership with the NFIP. State Farm customers should know that the company recently pulled out of its partnership with NFIP however. If you have a policy with State Farm for another type of insurance, and would rather not go to another company for flood insurance, you may go directly to the NFIP.

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Do you need flood insurance?

You should get flood insurance if your home is located in a moderate to high risk area for flooding. To be more specific, you should have flood insurance if you live in a "V" or "A" zone (Special Flood Hazard Areas (SFHA)) which are considered "very high risk" for flooding by FEMA. To find out if you live in a high risk zone, you can search your area's flood map here.

Should You Get Flood Insurance?
BHighly recommended

There's no question that sea levels are rising, and lands that were not susceptible to flooding a decade ago can be susceptible now, and even more so in the future.

Remember also that your standard homeowners insurance policy will not cover any damage caused by a natural flood. If you think there can be any chance your home may be flooded in the next decade, consider that just one inch of flood water can cause $10,000 of damage to a home, the average flood insurance claim is $30,000, and 20% of all claims come from "moderate to low risk" zones.

How much does flood insurance cost?

Flood insurance can cost as little as $400 per year for low-risk homes, and over $13,000 per year for high-risk homes. It all depends how elevated your home is and how far from the coast. To get a rough idea on what some plans may cost, we got some quotes from the Flood Insurance Agency's website for different types of home facing varying risk for $250,000 of building coverage and $100,000 of contents coverage with a $1,250 deductible.

South Carolina
Annual rate$2,365$1,507
Building coverage rate*$4.42$2.67
Contents coverage rate*$6.87$3.80
Elevation above river14.6
First floor elevation0.55.5
Miles to ocean1.54
Yards to river40120

*Building and contents rates are per $1,000 of coverage.

The NFIP may be able to get you discounts that aren't available through a private insurer, so they may end up being cheaper. You can also adjust your deductible for a higher amount to reduce your premium.

Your premium will also fluctuate depending on your home. The following are a few of the factors that will impact how much you'll pay for flood insurance:

  • Your home's age
  • Your home's construction materials
  • Your home's elevation
  • Whether you have a basement
  • The number of floors your home has
  • Distance to the nearest body of water

You can find providers of NFIP-backed flood insurance in your area, and get sample quotes, at

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