Should You Get Flood Insurance for Your Home?

“The most marginalized people are the ones who are going to be most affected,” he added, because they are more likely to live in areas more vulnerable to the effects of climate change, frequently receive a smaller share of federal disaster aid, and are less likely to be able to afford the high cost of insurance.

About 75 percent of all flood insurance policies are administered by FEMA’s National Flood Insurance Program. You can buy one of these policies through a local insurance broker or get referred to one by calling the national program at (888) 379-9531.

Any renter, homeowner or business owner in one of the 23,000 participating communities is eligible for a policy, with rates set by FEMA. But those rates are changing. Currently, the average annual premium is $734, according to ValuePenguin. But a new rating system, called Risk Rating 2.0, which FEMA rolled out this month, takes into account a home’s location, its size and its overall flood risk. While 23 percent of policy holders will see their rates drop under the changes, 66 percent could see their rates rise by as much as $120 a year, and 4 percent could see their rates rise by $240 a year. Existing policyholders will see rates rise beginning in April. Lawmakers from coastal states, including New York and New Jersey, have urged Congress to block the new rates.

The national program’s coverage is reliable, but it’s limited. Residential policies max out at $250,000 for the building and $100,000 for contents. And not all contents are covered. If your basement floods, your policy could replace your walls, boiler and hot-water heater, but not the cost of replacing any personal possessions in the basement, like sofas, televisions and clothes.

If you have a finished basement or live in an expensive area like New York, a national flood policy would probably not make you whole in a major disaster. “If you have a $500,000 home, you may have a huge gap” in coverage, Mr. Friedlander said.

There are other limits, too. These policies do not cover living expenses, so if you have to move out temporarily, you’ll have to cover those costs yourself. And new policies generally take 30 days to take effect, so homeowners looking for coverage for the rest of the 2021 hurricane season, which lasts through November, may be left without coverage during a high-risk period this year.

Private flood insurance typically offers more flexible coverage, but it isn’t available in all markets. Prices are not set by the government, so they fluctuate based on the provider’s risk assessment. And unlike the National Flood Insurance Program, a private carrier could drop you in the middle of a term or deny your renewal, potentially leaving you in the lurch in a disaster, according to ValuePenguin.