Flood Risks Are Everywhere: A New View on Flood Insurance

Most people think Flood insurance is necessary only for homes and businesses located near rivers, lakes or marked floodplains. Unfortunately, that's not the case.

"The biggest misconception is that you only need Flood insurance if you're in a flood zone or Special Flood Hazard Area (SFHA)," says Nick Orf, RPS area vice president — Flood. "However, just because you are not in a SFHA doesn't mean you don't have a risk of flooding."

It's Not Just High-Risk Areas

Flooding isn't limited to high-risk areas. In fact, according to FEMA, 20% to 40% of all flood losses occur in Zone X, classified as low or moderate risk.¹ The fact that lenders don't typically require Flood insurance in these areas can lull homeowners and business owners into a false sense of security.

"Just because it's not required by a lender doesn't mean there's no exposure," says Orf.

For example, in September 2024, Hurricane Helene landed in the Big Bend region of Florida with sustained winds of 140 miles per hour, resulting in $78.7 billion in damages, according to the National Oceanic and Atmospheric Administration (NOAA) Office for Coastal Management.²

Part of Hurricane Helene's damage was due to record-breaking flooding across much of western North Carolina, including Asheville and many surrounding cities and communities. Torrential rain and mountain runoff submerged Asheville beneath roughly 25 feet of water as rivers swelled, flattening or sweeping away surrounding communities.

Unfortunately, in some areas where Hurricane Helene hit the hardest — such as Buncombe County, home to Asheville — fewer than 1% of homes had Flood insurance, according to the Insurance Information Institute.³

The High Cost of Going Uninsured

FEMA disaster aid, when available, often comes in the form of small grants averaging just $5,000, which rarely covers the full extent of repairs to a home or office building damaged by flood.

"Just one inch of water can cause $25,000 in damage or more," says Orf.

Educate Clients on the Risk of Flood Damage

Orf recommends brokers educate clients about the risk of flood damage even if it's not mandated by lender and they aren't in a high-hazard flood zone.

"Over the life of a 30-year mortgage, a homeowner is generally more likely to experience a flood than a fire," notes Orf. Yet nearly everyone carries fire coverage. Flood insurance should be viewed the same way: as essential protection to consider on all properties.

"It's better to think about flooding as not if there will be a flood but when. Floodwaters don't stop at a line on a map," stresses Orf.

How to Get Flood Coverage

Flood insurance is accessible through both FEMA's National Flood Insurance Program (NFIP) and private insurers. Of the 78% who purchased Flood insurance, 35% did so through the NFIP while 43% went through private insurers, according to the Insurance Information Institute.⁴

For homeowners, the NFIP caps building coverage at $250,000 and contents at $100,000. For commercial properties, it's $500,000 each for building and contents — limits that may fall short for higher-value structures.

"If you need more protection, you can layer private Flood insurance on top of NFIP coverage," Orf explains. "If a property value exceeds the federal cap, clients can look to private market options for additional limits."

For brokers and agents, the message is clear: Have a conversation with clients, explaining that flood risk is real, even if their lenders don't require coverage or the properties are located areas classified as lower risk. Help them understand their options, whether through FEMA, private insurers or both.