Factors that increase a home’s risk include:
- Proximity to water. If a homeowner can see water from their house, they are at risk of flooding. Any river can flood, and a storm surge can strike any coastal community.
- Proximity to dams or levees. Any home anywhere near the nation’s 91,000 dams or 100,000 miles of levees is at risk of flooding. The United States Army Corps of Engineers has given 80 percent of the dams in the country a non-passing grade. Dam and levee failures spill water in cataclysms that devastate vast swaths of land. For example, the May 2020 failure of two dams in Midland, MI, led to floods that caused $200 million in damages and displaced 10,000 people – a quarter of the town’s population. Most of the flooded homes did not have flood insurance. In March 2019, hundreds of miles of levees in the Midwest were breached, overwhelming highways, farms, and entire towns.
- Location in an urban or developed area. When development replaces forests with pavement, less water reaches the soil, and the ground becomes more prone to flooding. The town of Ellicott City, MD, had “1-in-1,000-year” floods in 2016 and 2018 not because of overflowing rivers but because heavy rains sent flash floods sluicing down streets. Hurricane Harvey in 2017 caused extensive flooding in Houston largely because widespread development prevented rainwater from soaking into soil.
- Human Error. A fourth source of risk is omnipresent and cannot be quantified: human error. Examples of floods caused by human error include improper installation of road barriers in Louisiana and a power plant built incorrectly in North Carolina.
What should you do to mitigate your risk and protect your home?
When you close on your new home, give yourself some financial security and peace of mind with a flood insurance policy backed by the NFIP. While most homeowners insurance policies don’t cover flood damage, standard policies from the NFIP, on the other hand, may pay up to $250,000 for your dwelling and another $100,000 for the contents of your home.
If the home is in a FEMA-designated high-risk area, your mortgage lender will require you to buy a standard flood policy as a condition of making the loan. If the home is in a medium- or low-risk area, you may opt for a Preferred Risk Policy, which provides the same coverage as a standard flood policy at a reduced premium.
To obtain either of the above policies, simply ask your homeowners insurance agent. Certain NFIP flood policies have a 30-day waiting period. If you wait to buy insurance until the threat of flood is imminent, it may not protect you from financial loss.
Floods don’t only happen to other people. A tiny backyard stream can overflow its banks and inundate a neighborhood. When you’re a homeowner reeling from the emotional and physical shock of living through a flood, a flood insurance policy provides a financial lifeline that helps you rebuild your home and your family’s lives.