Do You Need Flood Insurance? I'm an Insurance Expert, and Here's Where You Can Get It

Standard homeowners insurance does not cover flood damage, so you might need separate flood insurance, which you can get either through FEMA or private companies. Here are the details.

A woman talks on her cell phone while standing in her flooded house.

(Image credit: Getty Images)

By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS

published 18 July 2025

in Features

There is no way to put a price tag or insure against the losses that people are suffering after the flooding in Texas. The damage to property can be calculated in dollars and cents, but the suffering and loss of life are incalculable.

We do need to have a discussion about the one part of this we have control over, though, namely what type of insurance policies are available to help us protect our physical assets from flood damage.

First and foremost, let's be sure we are all clear on the fact that no one who has a basic homeowners insurance policy has coverage for damage caused by flooding.

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You also do not have coverage for flood damage on your condominium owners insurance policy or your renters insurance policy.

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As a matter of fact, practically all property insurance policies specifically exclude the peril of flood damage. Flood insurance is something you have to purchase separately. Which means you have to think about it separately and plan for it separately.

Here's one way to buy flood insurance

There are two places to acquire flood insurance: One is FEMA, and the other is from a private insurance company. Let's dig a little deeper so you can see precisely how to do this.

A flood insurance policy through FEMA comes from the National Flood Insurance Program (NFIP). You can start the process of purchasing it here, or you can get the same policy with the assistance of a licensed insurance agent or broker.

I feel it fair to point out that the cost is identical in purchasing this policy, whether you purchase from a broker or through FEMA. I believe you will get better service and council from a licensed agent or broker. However, your mileage may vary.

Another way to buy flood insurance

The other way of purchasing flood insurance is from a private insurance company. These policies are almost exclusively offered by licensed independent insurance agents or brokers. You may find a company out there that will sell you a policy directly.

However, once again, since there is likely no cost savings in doing so, it's better to let the person with the license guide you through the process to ensure you actually get the coverage you want.

The private flood insurance market is larger than you may think, assuming you've given it any thought. You may wonder why insurance companies specifically exclude damage by flood and then turn around and sell it anyway.

Simple answer: The insurance companies offering home insurance, condo insurance and property insurance generally do not have the proper underwriting and processes, nor clearly the desire, to deal in flood insurance.

However, the private companies that do offer flood insurance … Well, they tend to offer only flood insurance and are experts in the field. Some of these companies specialize in high-risk exposures such as floods, wildfires, earthquakes and the like. They know their stuff.

What's the difference?

What is the difference between an NFIP policy and one from a private insurer? Well, in a word, a lot. Maybe that counts as two words? Moving on.

The NFIP policy will provide up to $250,000 for the structure and $100,000 for the contents of your property. That's it. That may seem like a paltry amount of money if your home is swept away by floodwaters.

I feel it is safe to say that there are many homes that would need more than $250,000 to rebuild them from scratch, and if that's accurate, then the policy offered is clearly inadequate.

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Private insurance companies can offer any type of coverage they wish. That means you may be able to get coverage up to the full amount needed to rebuild your home. At least, you may be able to select an amount upfront that is significantly higher than $250,000.

In addition, private insurers may give you the chance to purchase more in personal property coverage than $100,000.

More coverage from the private market will mean more money, right? Well, get ready for the surprise. More often than not, a private insurance company is going to offer a flood insurance policy at a cost that is less than what FEMA's NFIP policy offers. Wait, did I just say you can get more coverage for less money? Why, yes, yes, I did.

Keep in mind that a third of all flood claims that NFIP pays out are not in what are considered to be high-risk flooding areas.

Bottom line: Flood insurance is out there and available to purchase. It can be as inexpensive as $100 per year — yes, I've seen it — but depending on the amount of coverage and your property's exposure, I would expect it to cost more.

Hindsight is 20/20, of course, so let's try to learn from what we just saw in Texas and give ourselves an insurance checkup. And if we live in an area that could flood but we don't have flood insurance, let's seriously consider fixing that.

Want to learn more about insurance? Visit KarlSusman.com.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Karl Susman is an insurance agency owner, insurance expert witness in state, federal and criminal courts, and radio talk show host. For more than 30 years, Karl has helped consumers understand the complex world of insurance. He provides actionable advice and distills complex insurance concepts into understandable options. He appears regularly in the media, offering commentary and analysis of insurance industry news, and advises lawmakers on legislation, programs and policies.