Louisiana’s position on the Gulf Coast makes it vulnerable to flood damage. Flooding can happen when hurricanes hit or heavy rains pour down. And because much of southern Louisiana is at or below sea level, flooding can be catastrophic. Relying on home insurance to cover flood damage is common, but Louisiana homeowners should know that standard home insurance policies don’t cover flood damage. For that, you’ll probably need a flood insurance policy, which can cover both property damage and personal belongings caused by flooding. Some carriers offer coverage as a home insurance endorsement. Bankrate explored Louisiana flood insurance so you can decide if a policy is right for you.
Why Louisiana homeowners need flood insurance
According to data from the National Oceanic and Atmospheric Administration’s (NOAA) Storm Event Database, 2,510 flood events occurred in Louisiana between 1996 and 2019. The NOAA defines a flood event as the inundation of rising water into any normally dry area. The water can come from a river, stream, drainage system, or water pooling from rainfall. According to the Federal Emergency Management Agency (FEMA), just one inch of water can cause $25,000 worth of damage to a home.
Louisiana has spent billions of dollars in the last 20 years to rectify damage from hurricanes, yet many residents do not have flood insurance due to the added expense. Although flooding is a common natural disaster in Louisiana (and any coastal state), it is specifically not covered by homeowners insurance policies. However, there are some affordable flood protection options available.
Cost of flood insurance in Louisiana
The cost of your flood insurance will depend on several factors. First, and perhaps most impactful, is your flood zone. Flood zones help determine how likely a flood is in your area; the more highly rated your flood zone, the more likely you are to experience a flood and the water damage that comes with it. Your premium will typically be lower if you are in a less risky area and higher if you are in an area more prone to flooding.
Additionally, the coverage you purchase will affect how much you pay. Flood policies sold by the National Flood Insurance Program (NFIP) only have two coverage options: dwelling coverage and personal property coverage. Dwelling coverage is the backbone of a flood insurance policy and covers the structure of your home, while personal property coverage (also called contents coverage) covers your belongings. A dwelling-only policy will probably be cheaper than buying both coverage types. Also, the more coverage you purchase, the more your policy will likely cost.
Finally, your premium is also based on any flood mitigation features that you may have. Certain home features can decrease the risk of water damage from floods, like installing openings for the water to drain out and elevating your home. These features may help lower the cost of your policy.
When to purchase flood insurance
Whether you purchase from the NFIP or a private insurance company, most flood insurance has a 30-day waiting period. This means your policy won’t go into effect until 30 days after you’ve purchased the policy. There are some exceptions to this rule, such as for a loan closing.
Generally, you should give yourself plenty of time to shop for and buy a flood insurance policy. Most insurance carriers will not allow flood insurance to be purchased when a storm is in the forecast. If you know your home is at risk for flooding, you should consider getting a policy before any kind of damage is imminent. You should also be aware that flood insurance isn’t always optional. If you have a mortgage or other type of home loan and live in a flood zone, a flood insurance policy will likely be mandatory. It is also important to note that, typically, flood insurance policies require full upfront payment of the premium.
How to purchase flood insurance in Louisiana
The NFIP offers federally-supported flood insurance to homeowners and covers up to $250,000 for a building and $100,000 for building contents. Policies are available to anyone living in one of 23,000 participating NFIP communities. There are policies available through private insurance carriers for properties valued above the coverage limits and for anyone wanting to compare prices. A few homeowners insurance providers offer flood insurance policies for an additional cost.
Frequently asked questions
Does homeowners insurance include flooding coverage?
No, flood damage is excluded from standard home insurance policies. To obtain flood coverage, you will likely need to buy a flood insurance policy. The U.S. government provides federally-underwritten flood insurance through the NFIP, or you can get a policy from a private insurance company that underwrites its own coverage.
Is flooding insurance necessary in Louisiana?
It might be. Flood insurance isn’t legally mandated, but if your home is in a flood zone and you have a mortgage, your lender will probably require you to purchase a flood insurance policy as a condition of the loan. Even if you fully own your home, flood insurance might be a good purchase. FEMA reports that 99% of all counties in the country experienced a flood event between 1996 and 2019, so even homeowners in historically low-risk areas might benefit from a policy.
What happens if my home is damaged by a flood and I don’t have flood insurance?
Unfortunately, you’ll be responsible for the damage out of pocket; your home insurance policy is not likely to cover it unless you have a flood endorsement, which only a few companies offer. If a flood damages your home and you didn’t have a policy, you may be able to get help from your city, county or state, as well as from local nonprofits. FEMA provides a repository of ways to get assistance after a natural disaster.
What is the best home insurance company?
The best home insurance company for you will depend on your specific needs and wants. Getting quotes from several carriers to compare prices, coverage offerings and features could help you find the right fit. Just remember that home insurance doesn’t cover flood damage. If you also need a flood insurance policy, you’ll need to request separate flood insurance quotes.