Historically, flood insurance has been considered necessary only for properties located in higher-risk flood zones. But after Hurricane Helene took its toll on Western North Carolina last year, many home and business owners learned that even properties in low-risk flood zones are not immune to catastrophic water damage from storms.
Flooding doesn’t just result from rising rivers, creeks and streams; it can easily occur from oversaturation of the ground or heavy runoff and pooling around the foundation of a home. Properties with finished lower levels or walkout basements are particularly susceptible.
Post-Helene, property owners in Asheville and Western N.C. are learning that flood insurance might be necessary regardless of historical risk. Thankfully, there are multiple options available to assist property owners in obtaining affordable and comprehensive flood coverage.
Curious about flood insurance for your Asheville-area property? Following is an explanation of flood insurance (whether federally managed or private), the types of coverage, and the pros and cons, so you can make an informed decision about if, how and where to obtain such insurance for your own property - with a special thanks to Matt Juengel, owner of The Juengel Agency, for sharing his expertise.
Q: What is flood insurance, and what does it cover?
Flood insurance is a separate policy that specifically covers damage caused by flooding—water that comes from outside your home and rises into your home or property. Standard homeowners and renters insurance does not cover this type of damage.
Flood insurance typically covers:
Structural damage to your home or building
Electrical and plumbing systems
HVAC equipment, appliances, and flooring
Personal belongings like furniture, electronics and clothing (if contents coverage is included)
Depending on the policy, it may also include coverage for debris removal and certain increased cost of compliance expenses.
Q: If I’m not in a flood zone in Asheville or Western North Carolina, do I really need flood insurance?
Yes. In fact, more than 25% of all flood insurance claims come from areas considered low- or moderate-risk. Flood zones can be misleading. They are based on outdated maps or limited historical data and don’t always reflect current development, climate change or recent weather patterns.
Flooding can be caused by:
- Heavy rain
- Flash floods
- Snowmelt
- Overflowing creeks or rivers
- Clogged storm drains
- Hurricanes or tropical storms
- Construction that changes water flow
Even if you’re outside a mapped flood zone, you’re not outside the reach of water.
Q: What are the benefits of carrying flood insurance, even in low-risk areas of Asheville and WNC?
- Peace of Mind: You’re protected from one of the most expensive types of natural disasters.
- Affordable Premiums: In low-risk areas in Western N.C., flood insurance premiums are often much lower—sometimes just a few hundred dollars per year.
- Rapid Recovery: Claims can help you get back on your feet quickly after a disaster.
- Protects Home Value: A property with active flood insurance coverage is more financially resilient.
- No Federal Aid Guarantees: Government disaster assistance is only available if a federal disaster is declared—and even then, it may come in the form of a loan, not a grant.
Q: What’s the difference between the National Flood Insurance Program (NFIP) and private flood insurance?
The NFIP is managed by FEMA and offers standard flood policies for homeowners, renters and businesses. Coverage is limited to:
- $250,000 for building coverage
- $100,000 for personal contents
Private flood insurance, offered by independent insurance companies, provides more flexibility and broader options, such as:
- Higher coverage limits (up to several million dollars)
- Replacement cost coverage for personal belongings
- Shorter waiting periods (sometimes no waiting at all)
- Additional living expenses (ALE) if you’re displaced
- Coverage for basements and pools (excluded by NFIP)
- Customizable deductibles and enhancement
NFIP Coverage limitations
Flood insurance through FEMA's NFIP is helpful, but it has important limitations that policyholders should be aware of:
Actual Cash Value (ACV) vs. Replacement Cost
- Structure (Primary residence, 80% insured): May be eligible for replacement cost.
Contents: Always paid out on an Actual Cash Value basis—depreciated based on age and condition.
Exclusions & Limitations
- Basements & Below-Grade Areas:
- Limited coverage for items like furnaces, water heaters and electrical systems.
- No coverage for finished walls, floors, furniture or personal belongings in basements.
- Additional Living Expenses (ALE):
- Not covered. If you're displaced, NFIP won't pay for temporary housing, meals, etc.
- Business Interruption:
- Not covered. Lost income for businesses is excluded.
- Other Exclusions:
- Landscaping, fences, pools, decks and detached garages (beyond one) are not fully covered or excluded.
- Mold damage is excluded unless caused by a covered flood loss and you took reasonable action to prevent it.
Waiting Period
Typically a 30-day waiting period applies from the date of purchase to when the policy becomes active—exceptions exist for loan closings.
Severe Repetitive Loss Properties What is an SRL Property?
A Severe Repetitive Loss (SRL) property is one that has experienced multiple flood losses, making it high-risk and costly to insure. FEMA defines SRL properties as meeting either of the following:
- Criteria:
- Four or more separate NFIP claim payments (building & contents) of over $5,000 each, or
- At least two separate building-only claims with payouts totaling more than the current value of the structure.
The losses must occur within a 10-year period, and each must be at least 10 days apart.
Implications for Policyholders
- Higher Premiums: SRL properties may face surcharges or higher NFIP premiums due to their claim history.
- Mitigation Requirements: Policyholders may be required to take mitigation actions, such as:
- Elevating the structure
- Relocating
- Installing flood vents or drainage improvements
- Loss of Subsidies: If the owner refuses to mitigate, they may lose NFIP premium discounts or become ineligible for future FEMA assistance.
Mitigation Assistance
FEMA offers funding through programs like the Flood Mitigation Assistance (FMA) grant to help SRL property owners reduce risk and recurring loss through elevation, buyouts or reconstruction.
Q: Should You Consider Private Flood Insurance Instead?
Private flood insurance can be a strong alternative because it often offers things like higher coverage limits and shorter waiting periods than NFIP, replacement cost coverage for personal belongings, and customizable deductibles and enhancements.
Q: Isn’t private flood insurance more expensive?
Not necessarily. In many cases, private flood insurance is more competitively priced, especially in low- or moderate-risk areas. The cost varies based on location, property features, elevation and coverage needs—but because private insurers assess risk differently than FEMA, they can sometimes offer lower premiums for the same or better protection.
Q: Can mortgage lenders accept private flood insurance?
Yes, mortgage lenders are required to accept private flood insurance policies as long as they meet certain criteria. This means homeowners with federally backed mortgages in flood zones now have the option to choose between NFIP and private carriers.
Even if you're not required to carry flood insurance by your lender, you can voluntarily purchase a private policy for added protection.
Q: What’s the cost of not having flood insurance?
Just one inch of water can cause tens of thousands of dollars in damage to your home. Without flood insurance, you're responsible for all repair and replacement costs out of pocket.
Q: What’s the process for getting flood insurance?
You can purchase flood insurance through:
- An insurance agency that works with NFIP or private flood carriers
- Online platforms that compare options from various insurers
- Your current homeowners insurance provider, if they offer it
There’s usually a 30-day waiting period for NFIP policies to take effect, although private insurers often have shorter or no waiting periods, especially if tied to a mortgage closing.
Q: Are there any drawbacks to private flood insurance?
Private flood insurance policies can vary more in terms of coverage details, exclusions and claims processes than standardized NFIP policies. It’s important to:
- Read the fine print
- Compare options from multiple insurers
- Work with an experienced agent who understands flood risk and coverage nuances
Also, while rare, some private insurers may non-renew policies in certain high-risk areas. Still, the coverage benefits often outweigh this potential drawback.
Q: What should I ask when shopping for flood insurance?
Here are key questions to consider:
- What is the total coverage limit for structure and contents?
- Is replacement cost or actual cash value used?
- Are basements or lower levels covered?
- Are additional living expenses (ALE) included?
- What is the deductible?
- What’s the waiting period before the policy becomes active? Are there any exclusions I should be aware of?
To learn more, or to get a quote, speak to an independent insurance agent. They can review your Asheville property’s risk, compare policy options, and help you find the best coverage to suit your needs and budget.
For more information on real estate in Asheville or Western N.C., please contact us at Info@MyMosaicRealty.com, or call us anytime at 828-707-9556.
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