2025 Flood Insurance Report: New Mexico Sees Largest Policy Growth, Utah Has Biggest Decline

Flooding is the most common disaster in the U.S.

Despite this, the number of active National Flood Insurance Program (NFIP) policies decreased slightly between November 2023 and November 2024. This leaves just an average of 3.3% of households across the U.S. with NFIP coverage, according to the latest ValuePenguin study.

Here’s a closer look.

Key findings

Active flood insurance policies fall slightly

By state, New Mexico had the biggest surge, adding 2,616 active policies — a jump of 25.4%. This comes amid a severe storm that caused widespread flooding in New Mexico in October 2024, leading to a federal disaster declaration.

ValuePenguin home insurance expert Divya Sangameshwar says other disasters have also contributed to rising enrollment here.

"New Mexico’s increase in flood insurance enrollment can be attributed to the Federal Emergency Management Agency (FEMA) offering five years of flood insurance coverage for homes that weren’t required to carry it in areas affected by the Hermits Peak-Calf Canyon fire," she says. "This raises awareness of the importance of protection against flooding."

States with biggest percentage increases in active NFIP policies

Alaska and Maine followed with increases of 21.0% and 18.5%, respectively. Like New Mexico, both states experienced significant flooding in 2024, with Maine experiencing back-to-back winter storms that January and Alaska experiencing flooding along the Mendenhall River in August due to a glacial outburst (a climate-driven release of water that is dammed up by a glacier suddenly giving way).

Conversely, NFIP policies decreased the most in Utah at 37.5%. North Dakota (10.1%) and West Virginia (7.6%) followed.

Full rankings

States with biggest percentage increases/decreases in active NFIP policies

Average of 3.3% of households have NFIP coverage

In total, just 3.3% of households on average across the U.S. have NFIP coverage. That’s only about 4.7 million homes. Sangameshwar says this is concerning.

"Climate change continues to drive sea-level increases and make weather more extreme," she says. "As a result, flood-prone areas around the country are expected to grow by nearly half in just this century. Two years of back-to-back decreases in active flood insurance policies indicates that many homeowners aren’t fully aware of the growing risks of flooding."

Unsurprisingly, coastal states have the highest percentage of homes with NFIP coverage. Louisiana (20.9%) leads, while Florida (17.9%) and Hawaii (10.8%) follow.

Conversely, less than 1.0% of homes in 26 states have NFIP coverage. Minnesota (0.3%) leads here, with four states tying for second at 0.4%: Wisconsin, Utah, Michigan and Ohio.

Climate change means extreme rainfall is becoming more common across the U.S., particularly in the Midwest — meaning flood insurance may be more necessary than homeowners in these states believe.

Looking at average annual flood insurance costs, West Virginia ranks first, at $1,450. Connecticut ($1,306) and Kentucky ($1,272) follow. Meanwhile, flood insurance costs the least in the District of Columbia ($502), Utah ($658) and Maryland ($682).

Full rankings

States with highest/lowest percentage of NFIP coverage

Average payment for claims: $33,905

Looking closely at the majority of 2024, 98,667 NFIP claims were filed as of Nov. 30. Of these, 74,272 were paid out. The average payment per claim was $33,905.

Hurricanes Helene and Milton caused the most significant flood losses in 2024. Residents across seven states — Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee and Virginia — received claim payments. Of these, Florida residents affected by Hurricane Helene received the highest average claim, at $38,970 (for a total of $1.6 billion). Comparatively, the average claim for Hurricane Helene by state was:

Florida also received the highest average claim for Hurricane Milton damage, at $17,269.

Sangameshwar says more natural disasters and flooding will ultimately increase home insurance rates because they increase the cost of repairs and the risk of future losses.

"While home insurers don’t cover flood damages, from an insurance company’s perspective, a rise in flooding and flood risk will raise their reinsurance premiums," she says. "Flood insurance also takes a big hit from an increase in flood-related disasters. However, with NFIP policies, rate increases won’t be dramatic in areas where flood risk has gone up significantly due to the agency’s concerns over affordability."

2017 had highest number of paid flood claims

Looking at the decade from 2014 to 2023, the highest number and total dollar amount of NFIP paid claims occurred in 2017, at 112,385 paid claims for a total of $10.6 billion.

That’s largely due to major hurricanes, with Hurricane Harvey and Hurricane Irma occurring that year. Hurricane Harvey resulted in 92,390 paid losses for a total of $9.0 billion, while Hurricane Irma resulted in 33,337 paid losses for a total of $1.1 billion. (Note: The hurricane-specific figures are based on the event rather than the year, so the number of paid claims in 2017 is lower than the sum from the two storms. Some of these claims would have ultimately been paid the following year.)

Average payments per flood insurance claim by year

Between 2022 and 2023 (the last year with full data available at the time of research), the number of paid claims dropped by 64.8% from 46,527 to 16,392. Of the claims in 2023, 51.5% were paid to residents of Florida. Florida also received 67.7% of the total amount paid that year.

The most significant flood losses occurred during Hurricane Katrina in 2005, at $16.2 billion. Hurricane Harvey in 2017 ($9.0 billion) and Hurricane Sandy in 2012 ($8.9 billion) followed.

Policies outside high flood-risk zones are common — and so are losses

While those in high flood-risk zones are required to have flood insurance, it’s worth noting that an average of 39.1% of active NFIP policies across the U.S. are in areas not considered a high risk. Also of note, these areas account for an average of 30.6% of reported 2024 losses as of Nov. 30.

The District of Columbia had the highest percentage of losses outside high flood-risk zones at 85.6%, followed by Utah (81.3%) and Wyoming (61.6%).

States with highest percentage of NFIP losses outside high-risk zones

Meanwhile, only 12.0% of losses in New Jersey occurred in low flood-risk areas, followed by Florida (15.6%) and Delaware (16.5%).

Full rankings

States with highest/lowest percentage of NFIP policies outside high-risk zones

Flood insurance: Top expert tips

All homeowners should consider their flood risk, Sangameshwar says.

"Recent flood disasters demonstrated that floods don’t just occur in coastal, or low-lying, areas," she says. "Even if flood insurance is only required for a small subsection of homeowners, low flood risk doesn’t mean zero flood risk. And homeowners insurance and renters insurance don’t cover flooding."

"The good news is that NFIP premiums are the same regardless of the insurer or agent you go through, so you don’t need to shop around for an NFIP policy," Sangameshwar says. "For homeowners, rates are set based on factors such as the value of your property, the year it was built and flood risk. However, you can’t buy coverage beyond what the NFIP offers. In most cases, it covers $100,000 in personal possessions and $250,000 of your home’s value."

For homeowners who want more coverage, private insurers also offer flood insurance policies with higher coverage limits — something that’ll be helpful for higher-value homes that would be expensive to rebuild or repair. While NFIP policies typically require 30-day waiting periods, the waiting period to get covered under private insurance is generally 14 days. However, private flood insurance can be risky. Insurers could drop your coverage in the middle of your term or decline to renew it, leaving you scrambling for a new policy.