Homeowners can buy private coverage to add to their federal flood policies or buy an entirely private policy. Private coverage is offered by independent companies, including Lloyd’s of London, TypTap and Aon Edge. It often offers much higher coverage limits, as well as extra benefits like “loss of use,” which pays for your lodging if your home is uninhabitable. Private insurers, however, don’t have to offer you coverage if they consider your property too risky. And they may decline to renew your policy if your property is, in fact, damaged in a flood.
Unlike federal flood policies, private policies typically don’t include a surcharge for second homes that can greatly increase the annual premium.
Mr. Braley cited what he described as an “extreme” example: A small, historic house in Oak Bluffs on Martha’s Vineyard qualified for a private policy of $1,700 a year, compared with $11,800 for a federal policy.
It’s worth getting a quote for private coverage to compare with federal coverage to see which works best for you, said Amy Bach, executive director of United Policyholders, a consumer advocacy agency.
Here are some questions and answers about flood insurance:
Is flood insurance required?
If you have a property in a high-risk area, your mortgage lender will probably require you to carry flood insurance. You may want to buy coverage, however, even if your home is in an area that traditionally has not flooded. A quarter of flood claims come from properties outside high-risk areas, according to FEMA, but most homeowners in those areas are eligible for lower rates.
Because of climate change, it’s not just properties near the coast that are at risk from flooding, Ms. Bach said. Inland homes can be inundated by heavy rain, and properties near hilly areas devastated by wildfires can suffer erosion, leading to damage by flash floods.
“Don’t assume if your area hasn’t flooded before, it won’t now,” she said. “We’re in a new era.”
According to FEMA, one inch of water can cause $25,000 in damage.