How can I pay less for flood insurance?

Your insurance premium is based on a number of factors but there are a few key actions you can take to pay less for flood insurance each year:

Lower your flood risk.

What you pay for National Flood Insurance Program (NFIP) flood insurance often has a lot to do with how much flood risk is associated with your property.

Mitigating your flood risk not only protects your property against flood damage but can also help lower insurance costs. For more information, check out the Homeowner's Guide to Retrofitting.

Common flood mitigation options include:

  • Elevating the heating and cooling systems, water heaters, electrical panels, and other utilities so that they are less likely to be damaged in a flood may offer flood insurance savings.

    If your utilities are located below the base flood elevation (BFE), an annual surcharge may be added to your premium.

    Instead, consider using an attic, extra closet, or elevated platform to elevate utilities.

  • In a high-risk flood area, the NFIP requires all new construction and substantial renovations of basements to have flood openings to secure cost savings.

    Basements or other fully enclosed areas below the lowest elevated floor must have the following:

    • At least two flood openings, on at least two exterior walls
    • Openings of at least one square inch for each square foot of enclosed area
    • Flood openings with bottoms not be higher than 12 inches above the exterior ground

    Garage doors, windows, and exterior doors do not count as flood openings unless they have flood openings installed within them.

  • Unless explicitly authorized, basements in new construction in the high-risk flood area are prohibited and not covered by the NFIP.

    Filling in your basement can save you money. If your community has adopted basement standards, property owners in high-risk areas with basements will bear a 15 to 20 percent increase in their flood insurance premium.

    The NFIP defines a basement as “any area of the building having its floor below BFE on all sides.” That means crawlspaces that are below BFE on all sides are considered basements as well.

  • Elevating a home is the fastest way to reduce flood insurance costs.

    If you live in a high-risk flood area, you can save hundreds of dollars every year for each foot that the structure is elevated above the community’s BFE.

  • One of the most effective ways to reduce your flood risk and reduce your policy cost is relocating your structure to an area located above the BFE or outside the high-risk flood area.

    This method may be costly but can significantly reduce flood risk and the cost of flood insurance.

    If you’re building a new home, consider how and where to build based on BFE and flood risk.

    Of course, homes constructed outside of the high-risk area or above the BFE are not 100 percent safe from flooding. More than 1 in 3 flood claims come from properties outside high-risk flood zones.

Choose a higher deductible.

Choosing a flood insurance deductible amount is an important decision.

Choosing a higher deductible will lower your premium, but it means you will need to cover more of the cost to rebuild out of pocket (or out of savings).

You may choose different deductibles for building and contents coverage, and the deductibles will apply separately to building and contents claims.

Increasing the deductible on your flood insurance policy to the $10,000 maximum could reduce your annual premium by up to 40 percent. However, using the maximum deductible might not be appropriate or allowable for everyone.

Check with your insurance agent to confirm your deductible coverage amounts and ensure you understand your specific risks and opportunities.

Provide an elevation certificate.

While Elevation Certificates (ECs) will no longer be required to purchase coverage under Risk Rating 2.0: Equity in Action, a property owner may choose to provide an EC and submit it to their agent to determine if it will lower their cost of insurance. ECs will also continue to be used for floodplain management building requirements, which can affect eligibility for Community Rating System discounts.

Your community may receive a discount from the NFIP.

If your community is enrolled in the Community Rating System (CRS), you may receive a discount on your flood insurance.

The discount is calculated based on the community’s efforts to reduce the risk of flooding. If you have questions about the CRS, call your insurance agent or company.

You can also encourage your community officials to take part in the CRS.