The insurance industry in the United States netted premiums totaling a staggering 1.32 trillion dollars in 2019. That number continues to rise as populations balloon and environmental factors exacerbate.
If you’re a homeowner, among the many insurance policies you may be considering buying into is flood insurance. As its name suggests, flood insurance pays for damages caused by flooding brought about by natural disasters, backed-up drainage, and more.
If you’re curious to know the average cost of flood insurance before you take a deep dive into your insurance options, keep reading. Below, our team breaks down factors that can affect your flood insurance prices and rounds things out by sharing a couple of ballpark figures.
Cost of Living
Those of you that are residing in high cost of living areas are going to pay more for flood insurance than those that are living in lower cost of living areas. That’s mostly because high cost of living accompanies high property values, which may be the single biggest driver of insurance prices (more on that next).
A common reason why people lose their homes in expensive areas is that they fail to estimate the high cost of services associated with living in expensive communities. Don’t make that mistake and do plan for higher premiums in higher-end places.
The Price of Your Home and Property
Your flood insurance should compensate you for damage done to your home’s structure. Depending on your policy, it could also replace property inside your home. The more your home and the items within it are worth, the more your insurance provider stands to lose if disaster strikes.
Unsurprisingly, to mitigate that risk, private flood insurance companies will charge higher premiums to individuals that own things of higher value.
If your house isn’t at reasonable risk of experiencing a flood, you’ll be hard-pressed to find local insurers that even sell flood insurance. If you did, you’d find that policies would be dirt cheap. On the other hand, if your community experiences floods regularly, insurance may be so expensive that average families can’t afford coverage.
All of that to say, if you get an affordable house in a high-risk flood area, beware. Falling on the high end of the average cost of flood insurance could offset your home savings.
The Scope of Your Coverage
Do you want your flood insurance to just cover your home’s structure? If you do, you’ll save a lot of money versus if you want a policy that’ll help you recover the things inside your house that get damaged in a flood.
Having both of those coverage umbrellas will set you back more money. It will also provide a deeper sense of peace considering the higher level of protection.
Closing With Average Cost of Flood Insurance Figures
The average cost of flood insurance varies based on factors like cost of living, your home/property price, flood risk, and how much coverage you buy into. Because of those variables, it’s hard to give out an easy number you can lean on that you should expect when getting flood insurance quotes.
To give you some context, it’s estimated that the average annual flood insurance policy costs homeowners just under $800 per year. If you live in an expensive, high-risk area, you could easily pay $1500 per year or more.
We hope flood insurance companies in your area can offer you packages that fall within your budget so you can get protected. If you find yourself in need of more flood insurance cost information as you shop around, we’re here to help! Feel free to explore additional, related content on our blog.