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Myths vs Facts: The True Cost of Flooding

January 2022

Sometimes homeowners, renters and businesses choose not to purchase flood insurance based on myths and misinformation. This can be a costly mistake. Explore and share these facts to combat common myths, learn about the costs of flooding and flood insurance, and understand the value of flood insurance in helping people protect their property and the lives they’ve built.

Myth: Flood damage is covered by homeowners, renters or business property insurance.

Fact: Flood damage is NOT covered by most homeowners, renters and business property policies. FEMA’s National Flood Insurance Program (NFIP) defines flooding as an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.

  • Flooding is the most common and most costly natural disaster in the United States.
  • Just one inch of water can cause up to $25,000 in damage.

Myth: FEMA disaster assistance will cover any flood damage.

Fact: Disaster assistance is available only for areas affected by a Presidentially Declared Disaster. Disaster grants, when available, are designed to help begin the recovery process—not to restore a home to its pre-disaster condition.

  • Unlike disaster assistance, flood insurance can pay a claim regardless of whether there is a Presidential Disaster Declaration.
  • Federal disaster grants provide, on average, about $5,000 per household – while the average flood insurance claim payment over the past five years was about $69,000.
  • Much disaster assistance is in the form of U.S. Small Business Administration loans, which must be repaid with interest.

Myth: It’s impossible to get flood insurance where I live due to my level of flood risk.

Fact: Most homeowners, business owners or renters can insure a property located in a National Flood Insurance Program participating community.

  • More than 22,500 communities in all 50 states, District of Columbia, Guam, Northern Mariana Islands, Puerto Rico, American Samoa, Marshall Islands, Virgin Islands, "Territory of Pacific" and "US Minor islands" participate in the National Flood Insurance Program. Click here for a complete list of all participating areas.
  • Flood insurance is required for buildings located in high-risk areas, when the property’s mortgage is issued by a federally regulated, supervised or insured financial institution or federal agency lender.

Myth: I don’t need flood insurance if I live in a low-risk area.

Fact: Anywhere it can rain, it can flood. About 40% of flood insurance claims come from outside mapped high-risk flood areas.

  • With higher temperatures and other climate change impacts, more severe and unpredictable storms are increasing the flood risk in many areas.
  • Development, wildfires, and other changes that increase runoff also increase flood risks, even when a property is not close to a stream or body of water.

Myth: Flood protection for a property is too expensive.

Fact: When a property is in imminent danger of flooding, a National Flood Insurance Program policy may provide up to $1,000 in reimbursement for damage-preventing expenses, and there’s no deductible for this coverage. This can include costs for:

  • Renting storage space to protect belongings,
  • Buying sandbags and lumber to keep water out, and
  • Renting pumps to remove floodwater.

Myth: There’s no way to lower the cost of a flood insurance policy.

Fact: Property owners can lower flood insurance premiums in several ways, including:

  • Choosing a higher deductible for building and/or contents coverage; policyholders can increase the deductible up to the $10,000 maximum, which can reduce the annual premium by up to 40%.
  • Obtaining an Elevation Certificate, which provides additional information about the property and may, in some cases, lower the cost of flood insurance.
  • Taking flood mitigation actions to protect their property, which may also decrease premiums. These include:
  • Elevating heating and cooling systems, water heaters, electrical panels, and other utilities so they are less likely to experience flood damage.
  • Installing flood openings in fully enclosed areas below the lowest floor.
  • Filling in basements for properties in a high-risk area.

One final fact: flood insurance is the best way to financially protect property from flood damage. Learn more about flood risks and flood insurance and take advantage of tools, publications, and resources at FloodSmart.gov.

Disclaimer: The reader recognizes that the federal government provides links and informational data on various disaster preparedness resources and events and does not endorse any non-federal events, entities, organizations, services, or products. Please let us know about other events and services for individual and community preparedness that could be included in future newsletters by contacting FEMA-prepare@fema.dhs.gov

This article first appeared in the monthly Individual and Community Preparedness Newsletter. Subscribe here.