How to lower flood insurance premium costs

May 2, 2018

Property owners in high-risk coastal floodplains can be faced with expensive annual insurance premiums for flood insurance. Rates for policies offered through the federal National Flood Insurance Program (NFIP) can exceed $10,000 / year for coverage of $250,000 for structural damage and $100,000 for contents.

The Federal Emergency Management Agency (FEMA) lists five methods in their publication “Cheaper Flood Insurance: 5 Ways to Lower the Cost of Your Flood Insurance Premium.”

https://www.fema.gov/media-library/assets/documents/12423

These fall into two categories – “wet” where rising water is allowed to pass through or under the at-risk structure, and “dry” where water is prevented from reaching it.

The five methods suggested by FEMA are:

1. Relocate the home to a higher portion of the property (or build a levee around it)

Source: FEMA Publication

This method could potentially remove the structure from the floodplain entirely.

2. Raise utilities and mechanical systems

Source: FEMA Publication

All mechanical systems such as heating, ventilation, cooling, electrical, and plumbing can potentially be raised above the Base Flood Elevation (BFE) enough to result in a reduced premium rate.

3. Install flood openings in ground floor walls

Source: FEMA Publication

This is a relatively simple and lower cost solution especially for older homes built before standards for construction in floodplains were in effect.

4. Abandon and fill in basements with gravel

Source: FEMA Publication

Basements are normally prohibited for homes constructed in floodplains, however older homes may pre-date this requirement.

5. Elevate the entire structure

Source: FEMA Publication

This method could also potentially remove the structure from the floodplain entirely.

These methods can be very effective but are also costly and may not feasible in many situations.  Immediate benefit is gained from reduction of the flood insurance premium. However, the expense in cost, time, and trouble must be weighed against the potential future savings potentially gained by avoiding flooding damage.

If you are reading this, have you considered utilizing any of these techniques?  Is so, what has been your experience?