Understanding the True Cost of Flood Insurance: What Factors Determine your Premium

Cost of flood insurance

Are you worried about your property from natural disasters like floods? Are you in the process of evaluating the cost of flood insurance for your property?

Insurance premiums can be a complex puzzle to decipher. Gaining a thorough understanding is crucial to ensure you’re not caught off guard by unexpected rates.

In this article, we aim to demystify the factors that influence your flood insurance premiums. We’re here to provide you with the knowledge you need to understand the true cost of securing your property against flood damage.

Location and Flood Zone

One of the most significant factors affecting flood insurance premiums is your property’s location and its designation in a flood zone. The Federal Emergency Management Agency (FEMA) classifies areas into different flood zones based on flood risk.

Properties in high-risk flood zones will have higher premiums than those in low-risk zones. Your flood zone designation is determined by FEMA’s Flood Insurance Rate Maps (FIRMs).

Base Flood Elevation (BFE)

The BFE is the elevation at which FEMA predicts floodwaters will rise during a base flood, which is a 1% annual chance flood event. If your property’s lowest floor is below the BFE, your premium will be higher. Elevating your home or using flood-resistant construction methods to bring your property above the BFE can help reduce your premium.

Building’s Elevation

The elevation of your building’s lowest floor above the ground level is a critical factor. The higher the elevation, the lower the premium. Building above the BFE is strongly encouraged and often rewarded with reduced premiums.

Coverage Amount

The amount of coverage you choose for your property will directly affect your premium. You can purchase coverage for your building and its contents separately. Opting for a higher coverage amount will result in a higher premium.

It is essential to properly evaluate your coverage to avoid overpaying. You can learn more about allstateflood to check how you can get a premium for under $1,500.


Like other insurance policies, flood insurance typically has a deductible, which is the amount you must pay out of pocket before your policy coverage kicks in. Choosing a higher deductible will lower your premium but may result in higher out-of-pocket expenses in the event of a claim.

Flood Insurance Policy Type

There are different types of flood insurance policies available, including Standard Flood Insurance Policies (SFIPs) and Preferred Risk Policies (PRPs).

SFIPs are for properties in high-risk flood zones. PRPs are for properties in low-to-moderate-risk areas. PRPs are generally more affordable than SFIPs.

Age and Type of Building

The age and construction type of your building can affect your premium. Older buildings may have higher premiums, as they might not meet current building codes or be flood-resistant. Newer, flood-resistant construction may be eligible for lower premiums.

Waiting Period

Flood insurance policies typically have a waiting period. This means that there is a period of time between purchasing the policy and when it becomes effective. The length of the waiting period can vary, and policies with shorter waiting periods may have higher premiums.

Learn and Understand the Cost of Flood Insurance

Understanding the true cost of flood insurance is essential to protect your home. By considering the factors that determine your premium, you can make informed decisions that safeguard your property and your wallet.

After all, the cost of being unprepared can be much higher than any premium payment. So, take the time to understand your options and make sure you have the right flood insurance coverage for your home.

Want to learn more? Don’t forget to explore our other articles before you leave! We post new guides regularly!

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