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Homeowners risk gaps as flood losses hit outside FEMA zones
Firms at Amwins say about 29% of National Flood Insurance Program claims from 2014 to 2024 came from properties outside high-risk flood areas, and homeowners insurance generally does not cover flood perils.
For many homeowners, buying flood insurance can hinge on whether they sit inside a FEMA flood zone, but Insurance Business reports that a large share of flood damage occurs outside those mapped high-hazard areas. Flood specialists at Amwins warn that FEMA maps were not built to show where flooding actually happens, and they cite improved data and modeling that highlight that mismatch.
Amwins product development specialist for flood Ivan Maddox said designated zones do not indicate where flooding will go, adding that flooding does not stop at map boundaries. The outlet notes industry analyses found that most flooded properties were outside FEMA's Special Flood Hazard Areas, including First Street's estimate that 78% of flooded properties after Hurricane Debby were outside FEMA's high-risk zones.
FEMA's own data also point to the broader exposure, with Insurance Business citing nearly one-third of NFIP claims from 2014 to 2024 coming from properties outside high-risk flood areas. Amwins leaders say homeowners often assume their standard homeowners policy will respond, but they emphasize that flood perils, including water from hurricane storm surge, heavy rainfall, or overflowing rivers, typically require a separate flood policy.
The outlet also highlights how homeowners misread risk, with Amwins' flood business lead Colin Tinley describing how a perceived 1% annual chance can translate to about a 26% likelihood over a 30-year mortgage when compounded over time.