Majority of U.S. homes don’t have flood insurance despite rising risk

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Flooding is the most common and expensive natural disaster in the U.S. and 96.7% of homes don’t have flood insurance, according to a report by ValuePenguin.

In 2024, the average home sustained nearly $34,000 in flood damage, the data showed, with the most significant flood losses related to Hurricanes Helene and Milton in Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee and Virginia.

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

According to ValuePenguin, flood insurance isn’t mandatory unless the home is in a special flood hazard area (SFHA).

“Sadly, this means many homeowners are putting themselves at significant financial risk from future flood damages — especially when just one inch of flood water can cause $25,000 in damage,” said Sangameshwar.

Other key takeaways…

• Only 3.3% of homes (4.7 million) have Flood insurance coverage – and less than 1% of homes in 26 states have flood insurance. In Minnesota, Wisconsin, Utah, Michigan, and Ohio – less than 0.4% of homes have flood insurance.
• In 2024, 36 states saw a decline in flood insurance enrollment. The biggest drops were in Utah (37.5%), North Dakota (10.1%) and West Virginia (87.6%).
• The average flood insurance claim in 2024 was $33,906. Hurricanes Helene and Milton caused the most significant flood losses in 2024, with claims in Florida averaging $38,970 and North Carolina claims averaging $23,757.
• In 2024, 30.6% of reported flood losses were outside of FEMA-designated Special Flood Hazard Areas (SFHA). The states with the highest percentage of losses outside these are the District of Columbia (85.6%), Utah (81.3%) and Wyoming (61.6%).

Sangameshwar said that the recent disasters demonstrate that floods don’t just occur in coastal or low-lying areas.

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

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