The Growing Threat of Flood Damage

Flooding remains the most common and costly natural disaster in the United States, yet the majority of homeowners lack flood insurance coverage. According to a report by ValuePenguin, 96.7% of U.S. homes are uninsured against flood damage, leaving millions financially exposed.

In 2024, the average home sustained nearly $34,000 in flood-related damages, with significant losses stemming from Hurricanes Helene and Milton, which impacted Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia.

"Climate change continues to drive sea-level increases and make weather more extreme," said Divya Sangameshwar, a home insurance expert at ValuePenguin. “Flood-prone areas around the country are expected to grow by nearly half in just this century.”

Declining Flood Insurance Enrollment

Flood insurance is only mandatory for properties located within Special Flood Hazard Areas (SFHAs), meaning most homeowners are not required to carry coverage. However, experts warn that flood risks extend beyond these designated zones.

Key statistics from the ValuePenguin report highlight the decreasing number of homeowners with flood insurance:

• Only 3.3% of homes—approximately 4.7 million—have flood insurance.
• In 26 states, fewer than 1% of homes are insured against flooding.
• In 2024, 36 states saw a decline in flood insurance enrollment, with the most significant drops in Utah (37.5%), North Dakota (10.1%), and West Virginia (87.6%).

Rising Costs and Uninsured Losses

The financial impact of flooding continues to climb. In 2024, the average flood insurance claim was $33,906, with claims reaching $38,970 in Florida and $23,757 in North Carolina following Hurricanes Helene and Milton.

Furthermore, many flood losses occurred outside FEMA-designated high-risk zones:

• 30.6% of reported flood damages in 2024 happened outside SFHAs.
• The highest percentage of flood losses outside designated hazard areas were in the District of Columbia (85.6%), Utah (81.3%), and Wyoming (61.6%).

Flood Risk Beyond Coastal Areas

While flood insurance is often associated with coastal regions, recent disasters demonstrate that flooding can occur anywhere.

“Even if flood insurance is only required for a small subsection of homeowners, low flood risk doesn’t mean zero flood risk,” said Sangameshwar. “Homeowners insurance and renters insurance don’t cover flooding.”

As climate patterns shift and extreme weather events become more frequent, experts emphasize the importance of evaluating flood insurance options—regardless of location.

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