California’s wildfires have raged in recent years. But if you’re a California resident, you know flooding can be a big concern as well. In fact, flooding risk is greater than the risk of fire in many areas of the state. Every county in California has experienced a flood disaster at least 10 times in the past 70 years.
Here’s what you’ll need to know to choose the best flood insurance in California.
Best Cheap Flood Insurance Providers in California:
- Best for Fast Coverage: TypTap
- Best for Excess Coverage: AIG Private Client
- Best for Rate Protection: Private Market Flood (AIG’s Lexington Insurance)
- Best for Local Agents: Allstate
Best Cheap Flood Insurance Providers in California
Not long ago, flood insurance through the National Flood Insurance Program (NFIP) was the only choice for homeowners in many areas because private market providers didn’t provide flood insurance. However, times change and California residents can now choose from a number of flood insurance providers. High-tech solutions, including using AI to predict risk, have brought a stream of private market insurers and expanded the choices for California homeowners.
Here are our top picks for flood coverage in the Golden State.
1. Best for Fast Coverage: TypTap
If you could get a quote in seconds and bind flood coverage in just minutes, would you be interested? Compared to insurers that use NFIP policies, TypTap is lightning fast and getting a quote is a breeze. Just answer 3 questions and you’ll have a quote. From there, you can customize your coverage to meet your needs. Choose your own deductible to keep coverage affordable. You can also choose replacement cost coverage for personal property.
The company launched its business in 2016 to service homeowners in high-risk areas but TypTap’s insurance roots run deep. TypTap is part of HCI Group Inc., which includes one of the nation’s largest home insurers.
2. Best for Excess Coverage: AIG Private Client
Standard flood policies have their limitations, especially for California’s high-value homes. An NFIP policy only provides coverage for up to $250,000. AIG Private Client offers a cost-effective way to increase coverage limits for both your home and your personal property. Excess flood coverage with AIG pairs seamlessly with your existing coverage, extending your coverage limits to the amounts you need to fully insure your home.
Excess coverage can be added if you already have baseline coverage through AIG or if you have a comparable NFIP policy.
3. Best for Rate Protection: Private Market Flood (AIG’s Lexington Insurance)
A flood insurance policy that’s affordable this year could increase next year. AIG’s Lexington Insurance offers a unique solution through its Private Market Flood policies. You can now purchase a prepaid 2- or 3-year flood policy to sidestep rate increases common in the insurance industry.
You won’t have to sacrifice coverage with Private Market Flood. Policy provisions parallel those offered by a standard NFIP policy, which makes this choice great for homeowners who need baseline coverage. You’ll find lower rates than with an NFIP policy even if your home has had prior flood claims.
Waiting periods for new coverage are 14 days, which compares well with an NFIP policy’s 30-day waiting period.
Get an instant quote online and submit an application when you’re ready to bind coverage.
4. Best for Local Agents: Allstate
Most larger home insurance providers offer flood insurance. However, while the policy may be branded “Allstate” or “Farmers,” the policy is written through the NFIP’s Write Your Own (WYO) program. It’s an NFIP policy. Rates won’t vary from one WYO provider to the next, but you can take comfort in working with a local agent who knows your family and your insurance needs.
Allstate offers tens of thousands of agents throughout the nation. The company also invests more in flood-specific training than some other big-name insurers. Writing an NFIP policy requires experience and expertise to ensure proper coverage and accurate rates. If you need baseline flood coverage, consider your local Allstate agent.
Cost of Flood Insurance in California
Flood rates can vary dramatically even for homes in the same neighborhood. The insured value of your home plays a role. When you buy baseline coverage, like NFIP’s $250,000 limit, insured value plays less of a role than your home’s location. Higher-risk areas can expect higher premiums based on proximity to water and elevation.
According to the Insurance Information Institute, the average cost of a flood insurance policy is just under $700 per year, but California residents can expect to pay more in some areas or if your home is insured for more than $250,000.
If you have a mortgage, banking rules enacted in 2016 require lenders to escrow your flood insurance premiums in most cases. While flood insurance policies typically require an annual premium paid in full, escrow allows you to spread out the cost monthly and pay your premiums as part of your mortgage.
What Does Flood Insurance Typically Cover?
Your flood insurance can protect both your home and your personal belongings. However, much like other types of insurance, your coverage applies only to certain risks and uses specific definitions. For example, an NFIP policy defines a flood as the inundation of 2 or more acres of normally dry land or water that damages 2 or more properties. Other insurers offer more liberal definitions that may better address the gaps between a home insurance policy and a flood policy.
Flood policies can protect against both floodwaters and mudslides, both of which are excluded risks on a standard homeowners insurance policy. Baseline coverage that aligns with an NFIP policy includes dwelling coverage of up to $250,000 to protect your home and personal property coverage of up to $100,000 to protect your belongings.
Do You Need Flood Insurance?
If your home is in a high-risk area for flooding, it’s likely that your lender will require flood insurance. Banking rules allow some exceptions for smaller banks.
Your home is collateral on your mortgage loan and even a few inches of water in your home can cause tens of thousands of dollars in damage. You may not be able to easily pay for such a large expense and homeowners insurance won’t cover the risk. Flood insurance becomes a must-have coverage in areas designated as Special Flood Hazard Areas (SFHAs).
If your lender requires flood insurance, be sure to verify that they accept your flood insurance policy before you bind coverage. NFIP policies are universally accepted by lenders. Newer or lesser-known insurers may not be approved by your lender yet.
High-risk homes should buy coverage. However, even if your home is in a lower-risk area, flood insurance can be a sensible investment. Homes in low-risk areas typically enjoy lower rates and in cases when the policy can be escrowed, the monthly cost becomes more affordable than a large annual premium.
Many inland parts of California also face flood risks from rivers and the state’s extensive levee system. If your home is near a risk, even if you’ve never had a flood before, buying a flood insurance policy may be a wise investment.
Choose the Best Flood Insurance for Your California Home
The Golden State gets fewer named storms and less rain than southern coastline states but flooding can still be a big risk.
Fortunately, getting covered with flood insurance is easier than ever. Get some quotes, compare coverages and don’t be afraid to ask questions so you can make the right coverage choices to protect your home.