Flooding is often associated with coastal or high-risk areas, but recent events continue to show it can happen virtually anywhere. According to FEMA’s National Flood Insurance Program (NFIP), 99% of U.S. counties have experienced at least one flood event in the past 20 years. Roughly 40% of NFIP claims come from properties outside designated high-risk flood zones.
The recent flash floods in Texas’ Hill Country serve as a high-profile example. More than 100 people died along the Guadalupe River over the July Fourth weekend. President Donald Trump signed a federal disaster declaration for Kerr County on Sunday.
Despite the scale of the disaster, only 2.5% of homeowners in Kerr County had flood insurance, according to the Insurance Information Institute. Nationwide, just 3.3% of households had a flood insurance policy through the NFIP as of late 2024, based on data analyzed by Value Penguin.
Coverage Gaps Leave Homeowners Vulnerable
Loretta Worters, spokesperson for the Insurance Information Institute, stated that “flood insurance is not just for coastal or high-risk areas.” She added, “Every home can be exposed.”
In 2024, Hurricane Helene caused extensive flooding in Asheville, North Carolina — a mountainous region where less than 1% of households were covered by NFIP policies, according to the Swiss Re Institute.
Central North Carolina experienced additional flash flooding during the recent holiday weekend as Tropical Storm Chantal moved inland. State officials called it the most significant flooding event in several decades.
Why Floods Are Not Covered by Standard Policies
Flood damage is typically excluded from standard homeowners insurance policies. Daniel Schwarcz, a law professor at the University of Minnesota, explained that insurers avoid risks that lead to “highly correlated losses,” such as floods and earthquakes, because they often result in widespread claims at once.
Homeowners policies may cover certain types of water damage, such as a burst pipe, but do not cover damage from rising water levels, including flash floods.
Options for Flood Insurance
Homeowners seeking flood protection must purchase a separate policy. The NFIP offers up to $250,000 in coverage for residential building damage and up to $100,000 for contents. As of 2024, the NFIP had over 4.7 million policies in force, providing more than $1.28 trillion in coverage.
Worters noted that excess flood insurance is available through private insurers for homes that require higher coverage than what the NFIP provides. She also advised that NFIP policies typically have a 30-day waiting period before becoming active.
Private Flood Insurance Gains Ground
Private insurers are increasingly offering standalone flood insurance, driven by improved risk modeling. According to LendingTree, using 2023 data from S&P Global, the average cost of private flood insurance is $98 per month. In comparison, 2025 NFIP rate data reviewed by NerdWallet found that FEMA-backed policies average $75 per month.
Premiums can vary significantly depending on location and risk. Karl Susman of Susman Insurance Services emphasized the importance of comparing both NFIP and private options. Schwarcz agreed, stating that private insurers use different rating models, which can sometimes lead to lower premiums.
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