When financing a home, lenders require you to carry homeowners insurance. But did you know that standard policies don’t cover flood damage? This means that if a storm, hurricane, or heavy rainfall causes water to enter your home, your regular insurance won’t cover the repairs or lost belongings.
Flood insurance is critical in areas designated as high-risk flood zones. However, even in low-to-moderate risk areas, unexpected weather can lead to costly damage. Understanding when it’s required—and why—is key to protecting your investment.
What Flood Insurance Generally Covers
Flood insurance typically includes two main types of protection: one for the structure of your home and another for the personal belongings inside. These protections are usually sold separately, allowing you to purchase one or both, depending on your needs.
Most policies are administered through the National Flood Insurance Program (NFIP), managed by FEMA and distributed through over 47 insurance companies. A few private insurers also offer flood insurance, though NFIP remains the most common option.
Here’s a quick breakdown of what’s typically included, as well as excluded, in most flood insurance policies:
- Building Property Coverage: Covers the physical structure, foundation, HVAC systems, electrical, plumbing, and built-in appliances damaged by floodwater.
- Personal Contents Coverage: Protects belongings such as furniture, clothing, electronics, and other personal items that are lost or damaged in a flood.
- Excludes Landscaping, Mold, And Sewer Backups: Policies do not cover lawns, gardens, mold damage from neglect, or water damage caused by sewer or drain backups.
Common Misconceptions Surrounding Flood Insurance
Flood insurance is often misunderstood, leading many homeowners to skip this vital protection. Unfortunately, these assumptions can leave people financially exposed when disaster strikes.
Whether you live in a high-risk area or not, it’s essential to separate fact from fiction. Below are some of the most common myths—and the truth behind them:
- “I’m Not Required To Carry Flood Insurance, So I Don’t Need It.”
Flooding happens in every state and isn’t limited to high-risk zones. One inch of water can cause up to $25,000 in damage. - “I Was Not Offered Flood Insurance, So It’s Not Available To Me.”
Flood insurance is available to nearly every property owner. If NFIP isn’t an option, private insurers offer flexible alternatives. - “Flood Insurance Is Too Expensive.”
Many private insurers offer affordable plans and payment options. Competitive pricing makes flood coverage more accessible than most people expect. - “Fema Will Provide Financial Assistance If I Experience A Flood Loss.”
FEMA only provides assistance if a disaster is declared, and most aid is in the form of a loan, requiring repayment with interest. - “I’m In A Low-Risk Flood Zone, So It Won’t Flood Here.”
Over 20% of flood insurance claims come from low- to moderate-risk areas. Flooding can happen almost anywhere, often without warning.
When Are You Legally Required To Protect Your Property?
Homeowners insurance is generally not required by law, but most lenders make it a condition of your mortgage. Flood insurance follows a different rule. It’s not automatically required just because you have a mortgage.
However, if your property is in a FEMA-designated high-risk flood zone and you’re using a federally backed or regulated mortgage, then flood insurance is legally required. These rules exist to protect both the homeowner and the lender from major financial loss.
Required Only For Mortgages In High-Risk Zones
If you buy a home in a Special Flood Hazard Area (SFHA) using a federally backed loan, federal law requires you to carry flood insurance. SFHAs are areas where there’s at least a 1% chance of flooding in any given year—commonly known as the “100-year floodplain.”
Lenders must enforce this rule and maintain proof of coverage for the life of the loan. If you refinance or sell, the requirement stays in place as long as the new loan is federally regulated.
Flood Insurance Becomes Optional After Payoff
Once you’ve fully paid off your mortgage, federal flood insurance requirements no longer apply, even if your home is in a high-risk flood zone.
That said, removing coverage could leave you financially vulnerable. Flooding can happen anywhere, and repair costs can be significant without insurance.
Why “Saving” On Flood Insurance Can Cost You More
Flood insurance may seem like an added expense, but skipping it can result in a far greater financial loss after a flood. Just one inch of floodwater can cause up to $25,000 in damage, from flooring and drywall to appliances and personal belongings. Without coverage, those costs fall entirely on you.
As of March 2025, the national average annual cost of NFIP flood insurance was $898, or approximately $75 per month. In many low-risk areas, premiums can be as low as $60 to $70 per month. Your actual cost will vary based on your state, property location, and level of flood risk. Private insurers may charge more but often offer higher limits and broader coverage.
Things To Know Before Buying A Home In A Flood Zone
If you’re considering buying a home in or near a flood zone, it’s crucial to conduct thorough research before closing the deal. Understanding the flood risk, potential insurance requirements, and long-term costs can help you make a more informed and financially sound decision.
Here are a few key things to keep in mind as you evaluate your options:
1. Check The Property’s Federal Emergency Management Agency (FEMA) Flood Zone Designation
FEMA classifies all properties into flood zones based on risk levels, ranging from low to high. These zones help determine insurance requirements and potential costs. You can check a property’s designation using FEMA’s Flood Map Service Center. Knowing the zone early helps you plan for insurance needs and understand long-term flood exposure.
2. Ask If Flood Insurance Is Required By The Lender
If the home is in a high-risk flood zone and you’re using a federally backed or regulated loan, flood insurance is legally required. Your lender must confirm coverage is in place before closing. Even if it’s not required, they may still recommend it based on location and past flood activity.
3. Compare National Flood Insurance Program (NFIP) And Private Insurance Options
NFIP policies are widely available and federally backed, with fixed coverage limits and standard pricing. They’re often the default choice for homeowners in participating communities. Private insurers may offer higher coverage limits, added endorsements, and shorter waiting periods. Still, premiums can vary more by risk and location. Always compare both before deciding.
4. Look Into Elevation And Mitigation Features
A home’s elevation relative to the base flood level directly affects insurance rates and overall risk. Higher elevation often means lower premiums. Features like flood vents, raised utilities, and proper drainage can reduce damage and may even qualify you for insurance discounts. Review these details before finalizing your purchase.
5. Understand The Home’s Flood History And Past Claims
Ask the seller for a history of flooding and any previous insurance claims related to water damage. This information can reveal hidden risks. A home with a history of repeated flood claims may face higher premiums or limited coverage options. Reviewing this history helps you avoid surprises after you move in.
6. Factor Flood Insurance Costs Into Your Budget
If flood insurance is required—or if you choose to add this valuable protection—you’ll need to plan for it as part of your housing expenses. In low-risk zones, coverage may cost as little as $60 to $70 per month. Higher-risk areas typically come with increased premiums based on location and provider.
7. Review Local Drainage, Flood Maps, And Infrastructure
Study FEMA flood maps and consult with local officials to learn about drainage systems, retention ponds, and flood control efforts in the area. Good infrastructure can reduce flood risk and impact your insurance costs. Look for signs of poor drainage, such as pooling water or visible damage to nearby properties.
Why Choosing Property In Flood-Free Areas Makes Smart Financial Sense
Where your home is located plays a significant role in your long-term insurance needs, and overall peace of mind. Properties in flood-free or low-risk areas typically experience fewer weather-related disruptions and have significantly lower chances of water damage.
Lower risk also means fewer insurance requirements, reduced premiums, and more flexibility when financing a home. You may even choose to skip flood insurance altogether, depending on your lender’s terms and conditions.
Bedrock Communities properties are located in areas with minimal flood exposure. That makes them a financially sound choice for buyers looking to avoid unnecessary costs and future risk.
Bedrock Communities Are Thoughtfully Built In Flood-Free Locations
Choosing the right location is one of the most effective ways to protect your home from flood-related risks. At Bedrock, we take this seriously. That’s why all 26 of our communities are carefully developed outside of FEMA-designated high-risk flood zones.
Most of our properties are located in low- to moderate-risk areas, which means flood insurance is often not required, even if you’re using a federally backed mortgage. This can make a significant difference in terms of long-term affordability and peace of mind.
Our communities are also positioned with long-term climate resilience in mind. That means we evaluate each site for its ability to withstand changing weather patterns, storm runoff, and drainage demands—now and in the future. It’s all part of building smarter, safer places to live.
Live Confidently With Bedrock Communities
At Bedrock Communities, we believe peace of mind starts at home. Our neighborhoods are designed to offer comfort, convenience, and long-term value.
Residents enjoy thoughtfully maintained surroundings and lifestyle amenities, including clubhouses, pools, fitness centers, and community green spaces, that support both relaxation and connection. And because our communities are built in low-risk areas, you can enjoy all of this without the worry of high flood insurance costs.
Discover how Bedrock’s thoughtfully located communities offer peace of mind, without the worry of flood insurance mandates. Check out our available properties today!
