Homeowners in These U.S. Cities Need More Flood Insurance

As a wholesaler who provides private flood insurance for personal properties through multiple A.M. Best “A-” or better rated carriers, Personal Lines Leader and Vice President, Lee Branson, shares a recent article.  The article is from the personal financial website ValuePenguin, “Flood Season Is Coming. Homeowners in These Cities Need More Insurance”, which details cities that have the greatest exposure to flooding.  The article examines the importance for homeowners in these flood zones to secure comprehensive Flood insurance as a separate policy, as standard Homeowners policies do not cover flood damage.


Flood Season is Coming.  Homeowners in These Cities Need More Insurance.

With COVID-19 dominating public discourse, the continuing lack of flood insurance coverage in many cities may be going unmentioned as the 2020 flood season approaches.

Where disasters are concerned, 2020 is destined to go down in history as the year of the coronavirus — but that doesn't make the threat of seasonal weather events any less urgent.  As flood season approaches, ValuePenguin analyzed flood insurance coverage statistics from the National Flood Insurance Program (NFIP) to find out which cities have the greatest exposure to flooding.

Key findings:
  • Across the 100 largest U.S. cities, there are only four active flood insurance policies for every 10 houses located in high-risk flood zones.
  • In seven of those major cities, the ratio was lower than two per 100.  This included Detroit, St. Louis and Cleveland.
  • While the concept of a 100-year floodplain may not sound so dangerous, a homeowner in the floodplain actually has a 26% chance of being flooded over the duration of a 30-year mortgage.
  • Because standard homeowners insurance does not cover flood damage, it's important for homeowners in flood zones to understand and obtain effective flood insurance as a separate policy.
Cities with the lowest rates of flood insurance coverage

The level of preparedness for flood season varies from state to state.  While certain regions such as Florida and Louisiana are widely recognized as especially prone to flooding, every location in the U.S. has some level of exposure to flood risk.

To identify the cities that have the greatest amount of uninsured exposure, we combined data from the NFIP as well as New York University's Furman Center.  This allowed us to find the relationship between the number of active flood insurance policies and the number of owner-occupied housing units located in the 100-year floodplain.

City Total housing units Housing units in 100-year floodplain Active flood insurance policies Flood coverage ratio
Boise, ID 252,922 8,718 1 0.0%
Riverside, CA 1,521,284 40,083 344 0.9%
Detroit, MI 1,891,400 57,380 495 0.9%
St. Louis, MO 1,234,148 26,863 307 1.1%
Cleveland, OH 956,075 14,738 196 1.3%
Minneapolis, MN 1,412,408 40,624 609 1.5%
Youngstown, OH 260,750 5,003 89 1.8%
Cincinnati, OH 917,451 23,599 477 2.0%
Pittsburgh, PA 1,107,264 22,111 447 2.0%
Grand Rapids, MI 407,242 8,883 181 2.0%
Akron, OH 314,191 6,790 140 2.1%
Chicago, IL 3,800,969 75,848 1,713 2.3%
San Francisco, CA 1,763,363 48,411 1,137 2.3%
Rochester, NY 471,973 9,231 235 2.5%
Ogden, UT 211,632 2,933 77 2.6%
Dayton, OH 368,556 9,503 275 2.9%
Orlando, FL 964,253 142,388 4,169 2.9%
Columbus, OH 832,255 27,324 917 3.4%
Bakersfield, CA 289,529 14,136 496 3.5%
Milwaukee, WI 671,344 17,172 609 3.5%
Albuquerque, NM 378,660 20,749 738 3.6%
Springfield, MA 254,960 5,735 204 3.6%
Syracuse, NY 289,354 5,907 228 3.9%
Hartford, CT 507,998 23,674 919 3.9%
Worcester, MA 377,803 8,842 344 3.9%
Boston, MA 1,900,927 134,685 5,323 4.0%
Providence, RI 693,380 44,686 1,881 4.2%
Allentown, PA 343,328 7,822 340 4.3%
Birmingham, AL 505,097 19,518 897 4.6%
Atlanta, GA 2,202,308 69,013 3,301 4.8%
Kansas City, MO 880,710 16,577 805 4.9%
Richmond, VA 514,700 11,092 605 5.5%
Madison, WI 273,123 7,901 447 5.7%
Toledo, OH 272,553 10,221 579 5.7%
Salt Lake City, UT 394,677 3,008 172 5.7%
Buffalo, NY 519,952 7,262 420 5.8%
Knoxville, TN 387,132 6,323 381 6.0%
Tulsa, OK 418,311 24,611 1,497 6.1%
Fresno, CA 321,955 4,734 291 6.1%
Memphis, TN 560,530 22,364 1,465 6.6%
Tucson, AZ 446,769 20,176 1,460 7.2%
Spokane, WA 233,817 1,717 126 7.3%
Harrisburg, PA 244,633 10,156 793 7.8%
Wichita, KS 269,297 10,813 884 8.2%
Oklahoma City, OK 550,954 21,956 1,808 8.2%
Modesto, CA 180,169 2,518 214 8.5%
Lancaster, PA 206,297 3,976 376 9.5%
Las Vegas, NV 857,131 9,751 930 9.5%
Chattanooga, TN 236,121 13,090 1,272 9.7%
Dallas, TX 2,606,732 93,600 9,335 10.0%
Little Rock, AR 315,726 19,946 2,013 10.1%
Washington, DC 2,283,955 32,491 3,427 10.5%
Denver, CO 1,105,423 19,734 2,268 11.5%
Indianapolis, IN 831,014 36,511 4,279 11.7%
Omaha, NE 371,201 13,175 1,731 13.1%
Jackson, MS 236,284 25,625 3,541 13.8%
Lakeland, FL 282,248 7,881 1,164 14.8%
New York, NY 7,856,552 406,616 61,091 15.0%
New Haven, CT 362,351 24,223 3,726 15.4%
Greensboro, NC 326,902 6,241 961 15.4%
Philadelphia, PA 2,442,520 50,601 8,002 15.8%
San Diego, CA 1,180,806 20,899 3,317 15.9%
San Antonio, TX 854,730 43,489 6,930 15.9%
Portland, OR 936,745 14,602 2,339 16.0%
Augusta, GA 247,855 6,015 1,012 16.8%
Tampa, FL 1,368,924 385,727 73,665 19.1%
Louisville, KY 545,868 23,360 4,591 19.7%
Miami, FL 2,484,604 492,809 98,457 20.0%
Baltimore, MD 1,145,512 19,117 3,933 20.6%
Raleigh, NC 488,340 9,648 2,063 21.4%
Charlotte, NC 964,483 16,315 3,575 21.9%
Bridgeport, CT 363,556 27,347 6,088 22.3%
Cape Coral, FL 374,333 175,271 39,913 22.8%
Durham, NC 232,013 8,805 2,034 23.1%
Winston, NC 289,359 4,105 952 23.2%
Scranton, PA 258,371 6,949 1,622 23.3%
Albany, NY 396,552 7,330 1,732 23.6%
Palm Bay, FL 271,654 35,044 8,550 24.4%
Los Angeles, CA 4,541,360 73,089 18,200 24.9%
Oxnard, CA 283,899 9,895 2,529 25.6%
Austin, TX 744,484 32,375 8,406 26.0%
Deltona, FL 304,710 49,738 12,920 26.0%
San Jose, CA 664,228 32,591 8,540 26.2%
Nashville, TN 725,567 25,153 6,985 27.8%
Jacksonville, FL 610,600 85,933 25,121 29.2%
North Port, FL 407,196 50,440 15,279 30.3%
Phoenix, AZ 1,832,045 42,464 12,874 30.3%
Stockton, CA 236,562 10,295 3,225 31.3%
Baton Rouge, LA 339,045 101,252 39,115 38.6%
Seattle, WA 1,499,312 2,645 1,126 42.6%
Virginia Beach, VA 704,434 84,746 38,891 45.9%
Houston, TX 2,403,296 275,789 155,881 56.5%
Des Moines, IA 249,936 1,341 808 60.3%
Portland, ME 265,113 2,496 1,920 76.9%
Honolulu, HI 341,239 38,567 39,675 102.9%
El Paso, TX 282,641 3,098 3,502 113.0%
Sacramento, CA 881,401 19,085 43,844 229.7%
Provo, UT 164,292 56 131 233.7%
Colorado Springs, CO 274,475 168 1,466 870.2%
New Orleans, LA 552,061 7,473 162,149 2,169.9%

The lowest rates of active flood insurance were found primarily in cities and states that haven't experienced catastrophic flood damage in a long time.  These included cities such as Boise, Riverside and Detroit.  While some may think homeowners in these cities don't really need flood insurance, FEMA's definition of the 100-year floodplain applies the same to Boise as to New Orleans.

Some areas, including New Orleans, had very high levels of coverage.  This tended to happen in cities where the ratio of policies to high-risk properties exceeded 100%.  The recent memory of severe flood events likely prompted homeowners who live outside the 100-year floodplain to purchase flood insurance as well.

Flood insurance coverage appeared fairly low on a national scale as well.  When comparing the total number of policies versus vulnerable homes in all 100 cities, we found a ratio of roughly four policies for every 10 high-risk properties.  Meanwhile, the median city had just one active flood insurance policy for every 10 high-risk properties.

Why is flood insurance important?

Flood insurance is not a replaceable coverage.  Standard homeowners insurance policies do not offer any protection from damage caused by a natural flood, and every home in the United States has at least some risk of flood exposure.  These factors make proper coverage an issue of national concern.

FEMA maps out areas at high risk of flooding through the use of the 100-year floodplain — also referred to as special flood hazard areas (SFHAs).  This definition includes all areas that have a 1% chance of flooding in any given year.  While that may not sound like a high level of risk, it becomes substantial when multiplied over several decades.

A homeowner in the 100-year floodplain runs a 26% risk of seeing at least one flood during the 30-year span of a standard mortgage.

This is why mortgage lenders are federally required to make sure borrowers located in an SFHA insure their properties against flooding.  If you take out a mortgage to purchase a home in a high-risk area, you will need to build the cost of flood insurance into your budget alongside the cost of standard homeowners insurance.

How much does flood insurance normally cost?

The cost of flood coverage depends on your location and whether you pick public or private flood insurance.  On average, a flood insurance policy backed by FEMA's National Flood Insurance Program (NFIP) costs $708 per year.  However, the average may not tell you much because the prices vary greatly depending on your property and location.

The cost of flood insurance is connected to the level of risk in each policyholder's case.  For floods, that risk is approximated through the use of FEMA's flood maps, which place homes in one of several different flood zones.

Flood zone Annual risk Insurance requirement
B and X Moderate: 0.2% – 1% chance Not required
C and X Moderate: < 0.2% chance Not required
A, AE, AH, AO, AR, A1-30, A99 High: 1% chance Required
V, VE, V1-V30 1% chance Required
What to do if your home is in a high-risk flood zone

You can look up your property's flood zone designation with FEMA's online mapping tool.  However, the accuracy of FEMA's flood mapping has long been debated by homeowners.  Many are surprised each year by changes to the map that drive up their flood insurance premiums.

If you believe your property is improperly mapped, you and your lender can jointly request a flood hazard determination review from FEMA by filing a Letter of Determination Review.  The filing fee costs $80, and you must file the letter within 45 days of your lender informing you that your home is located in an SFHA.  Even if FEMA grants your appeal, the lender is still within its rights to require flood insurance as a condition of your mortgage.

Methodology

To look at how exposed major cities are to the risk of flooding, ValuePenguin relied on two data sources:

  • FEMA's Flood Insurance Policy Information by State and Community
  • The NYU Furman Center's FloodZoneData.us, which compiled the number of characteristics of housing stock located in FEMA flood zones

These sources told us how many flood insurance policies are active and how many housing units are located in the 100-year floodplain for each MSA.  Dividing the number of active policies by the number of housing units produced a ratio of flood coverage versus at-risk properties.  Cities represented in the table above include the 100 highest-population MSAs in the United States.

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The author
Chris is a Product Manager for ValuePenguin with years of experience in addressing critical questions about mortgages and homeowners insurance.  He spends his time evaluating insurance providers and policy features to understand where consumers might find the most cost-effective coverage.  Chris has contributed insights to the New York Times and many other publications.


Moon, Chris (2020, May 18). Flood Season Is Coming. Homeowners in These Cities Need More Insurance. Value Penguin.com.  Retrieved from https://www.valuepenguin.com/flood-insurance-coverage-cities

Reprinted from ValuePenguin with permission.

Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.

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