Flood Insurance
Flood Insurance in 2023: Utah Saw Largest Policy Growth, While West Virginia Had Biggest Decline
An inch of water can cause $25,000 in home damage, according to the Federal Emergency Management Agency (FEMA).
Despite this, the number of National Flood Insurance Program (NFIP) flood insurance policies in force (or active) decreased by 1.0% — or 47,201 — across the U.S. between November 2022 and November 2023.
Here's what else we found.
On this page
- Key findings
- Flood insurance policies in force drop by over 47,000
- Average payment per flood insurance claim tops $36,000
- Majority of U.S. households don't have flood insurance
- Arkansas has the most counties with the highest social vulnerability to floods
- Considering flood insurance? Here's what you should know
- Methodology
Key findings
- The number of NFIP flood insurance policies in force decreased by 1.0% — or 47,201 — across the U.S. from November 2022 to November 2023. By state, the number of active policies surged the most in Utah, increasing by 97.1% during this period. Vermont (7.3%) and the District of Columbia and Montana (both 5.1%) followed. Active policies decreased the most in West Virginia (9.8%), Oklahoma (8.0%) and Iowa (7.3%).
- Across the 3,186 NFIP claims closed with payments nationally in the first half of 2022, the average payment per claim was $36,294. In total, 57.9% of claims in this period were closed with payment. By state, Hawaii had the highest average payment per flood claim at $65,580, followed by Montana ($61,783) and Washington ($57,333).
- Only 3.3% of U.S. households have NFIP flood insurance. In 26 states, less than 1.0% of homes have NFIP flood insurance. Louisiana (21.9%) has the highest percentage of homes covered by this flood insurance, followed by Florida (17.3%) and Hawaii (9.9%). As for home insurance, the percentage of homes covered ranges from 41.0% in the District of Columbia to 74.5% in West Virginia.
- Six of the 25 counties or census areas with the highest social vulnerability to floods (meaning the most at risk for disproportionate death, injury, loss or disruption of livelihood) are in Arkansas. The one with the highest risk is the Yukon-Koyukuk census area in Alaska, followed by Bronx County in New York and McKinley County in New Mexico.
Flood insurance policies in force drop by over 47,000
Between November 2022 and November 2023, the number of NFIP flood insurance policies in force (meaning active) decreased by 1.0% across the U.S., or 47,201 total.
ValuePenguin home insurance expert Divya Sangameshwar says it's concerning that flood insurance policies have fallen, particularly as flooding becomes more common in the U.S.
"The decrease in flood insurance policies in force is a sign that more homeowners are putting themselves at significant financial risk from future flood damages," she says. "Floods have become the most recurring disaster in the U.S., exacerbated by climate change-driven sea level rise and extreme weather events. With flood-prone areas across the U.S. expected to grow by nearly 50% by the end of this century (according to a FEMA report), it's become more important for homeowners to protect their homes from flooding."
Data shows nobody is immune to flooding in the U.S. In fact, 99% of U.S. counties have been affected by flooding since 1998, according to FEMA. Additionally, about 40% of flood insurance claims are filed outside areas identified as those with high flood risk. According to another ValuePenguin study on flood risk, discrepancies in flood maps mean many homeowners may underestimate their property's risk of flooding.
By state, the number of active policies surged the most in Utah. The number of policies in force jumped 97.1% from 3,797 in November 2022 to 7,484 in November 2023. This comes after Utah's record-breaking winter storm in April 2023, which saw an average snow-water equivalent (the amount of water melted snow would produce) of 29.4 inches.
With intensified flood concerns, Utah Gov. Spencer Cox declared April as Flood Safety Month, likely alerting many residents to the importance of flood insurance.
States with the biggest increases in the number of flood insurance policies in force
Rank | State | Number of policies, November 2022 | Number of policies, November 2023 | Difference | % difference |
|---|---|---|---|---|---|
| 1 | Utah | 3,797 | 7,484 | 3,687 | 97.1% |
| 2 | Vermont | 3,062 | 3,285 | 223 | 7.3% |
| 3 | District of Columbia | 2,195 | 2,308 | 113 | 5.1% |
| 3 | Montana | 3,880 | 4,078 | 198 | 5.1% |
Source: ValuePenguin analysis of National Flood Insurance Program (NFIP) data.
Vermont followed at a distant 7.3%. Flash flooding in the state may have contributed to the increase in flood insurance policies. In July 2023, 3 to 9 inches of rain fell over 48 hours, with damage comparable to Tropical Storm Irene in 2011.
Following that, the District of Columbia and Montana tied, with active policies in both states growing by 5.1%. Like the two top-ranking states, D.C. and Montana experienced notable flood events in 2023.
On the other hand, flood insurance policies in force decreased the most in West Virginia, falling 9.8% from 11,237 to 10,135. Oklahoma and Iowa rounded out the bottom three, with active policies decreasing by 8.0% and 7.3%, respectively.
Full rankings
States with the biggest increases/decreases in the number of flood insurance policies in force
Rank | State | Number of policies, November 2022 | Number of policies, November 2023 | Difference | % difference |
|---|---|---|---|---|---|
| 1 | Utah | 3,797 | 7,484 | 3,687 | 97.1% |
| 2 | Vermont | 3,062 | 3,285 | 223 | 7.3% |
| 3 | District of Columbia | 2,195 | 2,308 | 113 | 5.1% |
| 3 | Montana | 3,880 | 4,078 | 198 | 5.1% |
| 5 | Wyoming | 1,602 | 1,675 | 73 | 4.6% |
| 6 | Florida | 1,658,078 | 1,710,539 | 52,461 | 3.2% |
| 7 | Alaska | 2,256 | 2,325 | 69 | 3.1% |
| 8 | Rhode Island | 11,236 | 11,483 | 247 | 2.2% |
| 9 | Massachusetts | 54,662 | 55,741 | 1,079 | 2.0% |
| 10 | Colorado | 17,716 | 17,930 | 214 | 1.2% |
| 11 | Connecticut | 31,386 | 31,603 | 217 | 0.7% |
| 12 | Delaware | 26,027 | 26,177 | 150 | 0.6% |
Source: ValuePenguin analysis of NFIP data.
Average payment per flood insurance claim tops $36,000
Nationally, 3,186 NFIP flood insurance claims were closed with payments in the first half of 2022. Of these claims, the average payment per claim was $36,294. Overall, 57.9% of claims in this period were closed with payment.
Sangameshwar says it's concerning that the percentage of claims closed with payment is so low. "Flood claims closed without payments usually happen because the claim damage amount is less than the deductible, there was no actual occurrence of a flood as defined by the NFIP contract (for example, your house may have flooded because of a burst pipe, but that doesn't fall under the NFIP definition of a flood) or there was no demonstrable damage," she says.
Of course, the NFIP claims process is full of deadlines, technicalities and formalities — which may explain the volume of claim denials. Additionally, Sangameshwar says policyholders may have misunderstood their flood and home policies and filed a flood claim instead of a claim with their homeowners insurance company. Additionally, they could have filed a claim for an excluded peril — like a landslide or a sinkhole — even if damage was caused by a flood.
By state, Hawaii had the highest average payment per flood claim. Of the 61.6% of claims closed with payment, the average payment was $65,580. Montana followed, with 29.6% of claims closed with an average of $61,783 paid per claim. Washington rounded out the top three, with 74.2% of claims closed at an average of $57,333 paid per claim.
States with the highest average payments per flood insurance claim
Rank | State | Average payment per claim | Claims closed with payment loss | Total payments | % closed with payment |
|---|---|---|---|---|---|
| 1 | Hawaii | $65,580 | 61 | $4,000,376 | 61.6% |
| 2 | Montana | $61,783 | 32 | $1,977,041 | 29.6% |
| 3 | Washington | $57,333 | 500 | $28,666,496 | 74.2% |
Source: ValuePenguin analysis of NFIP data.
As for where residents were most likely to have a claim closed with payment, Alaska and New Mexico ranked first, with 100.0% of claims in these states closed with payment. Of course, the number of claims filed plays a role: Just four of these claims were closed in Alaska and one in New Mexico. The average payment per claim was $20,151 in Alaska and $1,062 in New Mexico.
On the other hand, residents in Connecticut were least likely to have a claim closed with payment, at 22.2%. Across these claims, the average pay was $27,615.
Full rankings
States with the highest/lowest average payments per flood insurance claim
Rank | State | Average payment per claim | Claims closed with payment loss | Total payments | % closed with payment |
|---|---|---|---|---|---|
| 1 | Hawaii | $65,580 | 61 | $4,000,376 | 61.6% |
| 2 | Montana | $61,783 | 32 | $1,977,041 | 29.6% |
| 3 | Washington | $57,333 | 500 | $28,666,496 | 74.2% |
| 4 | Oklahoma | $53,577 | 91 | $4,875,513 | 80.5% |
| 5 | Alabama | $51,275 | 242 | $12,408,647 | 78.1% |
| 6 | Maine | $41,790 | 5 | $208,950 | 71.4% |
| 7 | Arkansas | $41,256 | 106 | $4,373,119 | 75.2% |
| 8 | California | $40,566 | 137 | $5,557,478 | 55.2% |
| 9 | Florida | $37,099 | 242 | $8,977,886 | 36.6% |
| 10 | Texas | $34,358 | 258 | $8,864,269 | 56.1% |
| 11 | Kentucky | $33,266 | 104 | $3,459,660 | 77.0% |
| 12 | West Virginia | $32,616 | 60 | $1,956,983 | 75.0% |
Source: ValuePenguin analysis of NFIP data. Note: States without flood insurance claims were excluded from our analysis.
Majority of U.S. households don't have flood insurance
Despite the prevalence of flooding and the damage it poses, only 3.3% of U.S. households have NFIP flood insurance, according to a ValuePenguin analysis of NFIP and U.S. Census Bureau data. Breaking that down, less than 1.0% of homes in 26 states have this flood insurance.
According to Sangameshwar, this can be largely attributed to the flood maps created by FEMA, which designate areas at risk of flooding and set flood insurance requirements based on these maps. "Homeowners aren't getting flood insurance because they either aren't required to or don't think they need to," she says. "Only homeowners with federally backed mortgages who live in special flood hazard areas — which FEMA says make up just 221,000 square miles in the U.S. — are required to have flood insurance."
Meanwhile, North Carolina State University researchers found a high probability of flood damage for over 1 million square miles in the U.S. — putting many more homeowners at risk than FEMA estimates.
"This is why relying on FEMA flood maps alone can prove risky for homeowners," she says. "In addition to significantly underestimating flood risk, FEMA doesn't continuously update their flood maps to reflect intense rainfall events or sea level rise. And since the flood mapping process is time-consuming, research-intensive and expensive, only 61% of the continental U.S. has been flood mapped, leaving thousands of communities vulnerable."
The rising cost of flood insurance may also have led to some homeowners opting out of flood coverage. In 2021, FEMA added additional flood risk variables (including flood frequency, flood type and property characteristics) into calculating premiums, which led to 77% of flood insurance policyholders seeing their premiums increase, according to another ValuePenguin study.
States with the highest percentage of homes covered by NFIP flood insurance
Rank | State | Total homes | Number of NFIP policies, November 2023 | % of homes with NFIP flood insurance | % of homes with home insurance | Average annual cost of flood insurance |
|---|---|---|---|---|---|---|
| 1 | Louisiana | 2,080,371 | 454,955 | 21.9% | 67.6% | $736 |
| 2 | Florida | 9,915,957 | 1,710,539 | 17.3% | 67.2% | $613 |
| 3 | Hawaii | 560,873 | 55,565 | 9.9% | 62.6% | $687 |
Source: ValuePenguin analysis of NFIP, U.S. Census Bureau and Insurance Information Institute (III) data.
By state, Louisiana has the highest percentage of homes covered by NFIP flood insurance, at 21.9%. It's followed by Florida (17.3%) and Hawaii (9.9%). Flood insurance requirements play a role here. According to the previous ValuePenguin study on flood risk models, Louisiana (23.5%) and Florida (18.9%) have the highest percentages of homes in a FEMA Special Flood Hazard Area (SFHA), where homeowners with federally backed mortgages are required to have flood insurance.
All three states also have relatively low flood insurance costs, which may contribute to the percentage of homes covered. While flood insurance costs an average of $736 per year in Louisiana, it costs $687 in Hawaii and $613 in Florida. The national average is $985.
Notably, Florida has the lowest average flood insurance cost of any state, followed by Maryland ($630) and South Carolina ($637). Meanwhile, Vermont has the highest average flood insurance cost, at $1,648 per year.
As for home insurance, the District of Columbia (41.0%) has the lowest percentage of homes covered, while West Virginia (74.5%) has the highest.
Full rankings
States with the highest/lowest percentage of homes covered by NFIP flood insurance
Rank | State | Total homes | Number of NFIP policies, November 2023 | % of homes with NFIP flood insurance | % of homes with home insurance | Average annual cost of flood insurance |
|---|---|---|---|---|---|---|
| 1 | Louisiana | 2,080,371 | 454,955 | 21.9% | 67.6% | $736 |
| 2 | Florida | 9,915,957 | 1,710,539 | 17.3% | 67.2% | $613 |
| 3 | Hawaii | 560,873 | 55,565 | 9.9% | 62.6% | $687 |
| 4 | South Carolina | 2,362,253 | 201,211 | 8.5% | 72.0% | $637 |
| 5 | Delaware | 451,556 | 26,177 | 5.8% | 74.1% | $757 |
| 6 | Texas | 11,654,971 | 665,335 | 5.7% | 62.5% | $656 |
| 7 | New Jersey | 3,756,340 | 203,940 | 5.4% | 64.6% | $957 |
| 8 | Mississippi | 1,324,992 | 55,037 | 4.2% | 69.9% | $830 |
| 9 | North Carolina | 4,739,881 | 131,682 | 2.8% | 66.7% | $742 |
| 10 | Virginia | 3,625,285 | 92,860 | 2.6% | 67.4% | $796 |
| 11 | Maryland | 2,531,075 | 63,107 | 2.5% | 67.7% | $630 |
| 12 | Rhode Island | 483,053 | 11,483 | 2.4% | 63.3% | $1,427 |
Source: ValuePenguin analysis of NFIP, Census Bureau and III data.
Arkansas has the most counties with the highest social vulnerability to floods
Beyond insurance, social vulnerability to floods (meaning the risk of disproportionate death, injury, loss or disruption of livelihood) is another factor to consider. Notably, six of the 25 counties or census areas with the highest social vulnerability to floods are in Arkansas.
That's largely due to Arkansas' geography, which makes it prone to various types of flooding. Several major rivers intersect Arkansas, including the Arkansas, Mississippi and White rivers, which have historically experienced significant flooding events. Additionally, the state has a high percentage of people in poverty, which increases social vulnerability to floods.
25 counties or census areas with the highest socially vulnerable flood hazard risk
Rank | County or census area |
|---|---|
| 1 | Yukon-Koyukuk census area, Alaska |
| 2 | Bronx County, New York |
| 3 | McKinley County, New Mexico |
| 4 | Holmes County, Ohio |
| 5 | Desha County, Arkansas |
| 6 | Real County, Texas |
| 7 | Chicot County, Arkansas |
| 8 | Dimmit County, Texas |
| 9 | Monroe County, Arkansas |
| 10 | Magoffin County, Kentucky |
| 11 | Wyoming County, West Virginia |
| 12 | Breathitt County, Kentucky |
Source: ValuePenguin analysis of Census Bureau 2022 Community Resilience Estimates data.
Among those with the highest social vulnerability to flood risk, the Yukon-Koyukuk census area in Alaska ranks first. It's followed by Bronx County in New York and McKinley County in New Mexico.
Considering flood insurance? Here's what you should know
Americans typically associate flooding with coastal areas or areas prone to severe weather like tropical storms or hurricanes, but Sangameshwar says homeowners outside of places with these risks should still be aware of flooding.
"Even if flood insurance is only required for a subsection of homeowners with a federally backed mortgage for a home in a special flood hazard area, it's important to remember: If it can rain, it can flood, and low flood risk doesn't mean zero flood risk," she says.
For homeowners considering flood insurance, Sangameshwar recommends the following:
- Consider your flood insurance options. "You can purchase flood insurance through an agent or an insurer participating in the National Flood Insurance Program," she says. "There are no restrictions on who can purchase a policy, and you don't need to live in a floodplain or high-risk area."
- Know that NFIP premiums are the same, no matter what insurer or agent you go through. "Rates are set by the NFIP and depend on predetermined factors such as the value of your property, the year it was built and flood zones," Sangameshwar says. "You also can't buy coverage beyond what the NFIP offers, which in most cases just covers $100,000 in personal possessions and $250,000 of your home's value."
- Private flood insurance policies are also an option. "These allow you to purchase more coverage, which can be appealing if your home would be expensive to rebuild or repair," she says. "And unlike NFIP policies, the waiting period for a private flood insurance policy is typically 14 days. However, private flood insurance can be risky since these insurers can drop your coverage midterm or decline to renew it. While you can get an NFIP flood insurance policy, you're required to wait 30 days before it kicks in."
Methodology
ValuePenguin researchers analyzed National Flood Insurance Program (NFIP) flood insurance policies in force and claims data, utilizing the most recent available data at the time of research. Policies and claims data is as of Nov. 30, 2023, while financial loss data is as of June 30, 2022.
To determine the percentage of homeowners with flood insurance, researchers divided the number of active NFIP policies by the number of housing units — via the U.S. Census Bureau 2022 American Community Survey with five-year estimates. The percentage of insured homes by state is from the Insurance Information Institute (2022).
Finally, researchers analyzed U.S. Census Bureau 2022 Community Resilience Estimates data to determine the counties or census areas with the highest social vulnerability to floods.