California homeowners don’t seem to think much about flood risks with few insured against watery storm damage.
My trusty spreadsheet examined flood insurance coverage stats compiled by ValuePenguin by LendingTree, tracking the dominant seller of this coverage: the federal government’s National Flood Insurance Program.
The statistics show that 184,729 California homes last year had an NFIP policy, the sixth-largest group among the states.
However, while California has 10% of the nation’s homes it only has 4% of the 4.7 million flood policies nationally.
Yes, it may appear odd for most Californians to ponder flooding in an often drought-ravaged state where wildfire is seen as the greatest home hazard. Let’s note where flood policies are frequently bought – hurricane country: Florida, No. 1 at 1.77 million, followed by Texas, at 639,256, Louisiana, at 434,853, New Jersey, at 200,764, and South Carolina, at 198,606.
But flood insurance is often misunderstood. It can cover damages from various disasters not covered by traditional homeowner policies – such as rising water due to heavy rains or ocean surges.
On the flip side, the government’s flood coverage offers limited protection – covering only up to $250,000 in structural damage and $100,000 for contents. That protection shortfall is a reason why California’s flood policies cover just 1.3% of its residential properties. Yes, that means 98.7% don’t have it.
California has the 20th-largest share of homes covered with flood policies among the states. But flood policies statewide are far below the 3.3% share of all homes covered nationally.
Louisiana is the most likely place to find flood insurance, with 21% of its housing covered, followed by Florida, with 18%, Hawaii, with 11%, South Carolina, with 8%, and Delaware, with 6%.
As for price, a typical California flood policy costs $993 yearly – that’s No. 20 among the states and 11% above the $892 national norm. The costliest policies come from West Virginia at $1,450 annually, followed by Connecticut at $1,306, Kentucky at $1,272, Pennsylvania at $1,261, and New Jersey at $1,247.
Look, some California bet the house. Only 90% of California have traditional home insurance, with fire the big risk, while just 12% have earthquake coverage.
Wet risks
So, what are the odds a Californian gets hit by a flood incident?
Well, the federal government’s National Risk Index ranks states by their relative property perils – including three watery hazards often covered by flood insurance.
California ranks 22nd highest for coastal flooding dangers, which is not terribly surprising considering numerous homes near the Pacific Ocean. The riskiest are New Jersey, Delaware, Louisiana, Washington, and Oregon.
California is ranked 29th in river flooding hazards. Remember, the state’s usually dry creeks can quickly become raging streams when rare storms hit. The riskiest states are Louisiana, Texas, West Virginia, North Dakota, and Tennessee.
And California is No. 38 for Hurricane risk. Now when “Hilary” struck Southern California in August 2024. it didn’t qualify as a tropical storm – but significant water damages occurred.
Of course, Florida is the hurricane hotspot, followed by Louisiana, South Carolina, North Carolina, and Mississippi.
Bottom line
Natural disasters of all types are an lightly discussed risk of property ownership.
California has the 37th highest flood risk among the states, according to my composite index of three watery worries. Those modest odds for property loss may help explain the low use of flood insurance.
The riskiest spots, by my math, were Louisiana, Mississippi, Texas, New Jersey, and Florida – states that account for two-thirds of NFIP policies.
But does a Californians need flood insurance? Well, for starters, check if your home is in an official flood zone. Go to the Federal Emergency Management Agency’s map at https://msc.fema.gov/portal/search
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com