Is flood insurance required in California?

Flood insurance is not required by law in California. However, lenders can require you to obtain flood insurance.

For example, if you have a federally-backed mortgage for a home in a designated high-risk area, then that lender has to require you to carry flood insurance, according to the National Flood Insurance Program (NFIP).

That said, most Californians do not have flood insurance, even though climate change is increasing risk.

“Water has shaped the California landscape even more than earthquakes. And yet, less than 2% of homes in California are insured for floods. What’s worse, this number has decreased by 35% in the past 10 years, even while Californians have experienced more flooding,” says Kate Stillwell, California-based president of parametric insurance at Neptune Flood, a private flood insurance company.

How much is flood insurance in California?

The average cost of flood insurance in California for an NFIP policy is $940 per year. This means California flood insurance costs over $200 more annually than the national average.

The specific costs, however, depend on factors such as the risk area you live in, with high-risk areas — Zone V or A — being more expensive to insure. Having a basement also results in higher rates, one upside for many California homeowners, since basements are uncommon.

California flood insurance cost also depends on the specifics of your policy.

“The most effective way to lower costs is to increase your deductible,” says Stillwell.

“Also, homeowners should take the time to compare NFIP costs with private insurers. NFIP premiums are partly cross-subsidized, meaning lower-risk areas pay slightly more to offset costs in the highest-risk areas. Private insurers may offer lower prices, especially for homes in a moderate- or lower-risk area, or homes where the lowest floor is elevated above the ground level,” she says.

Keep in mind that deductibles differ for your home’s structure vs. personal property.

“So if you have a $1,000 deductible and you experience damage to both your building and contents, you will be responsible for the first $1,000 for the building, plus the first $1,000 for the contents,” says Stillwell.

California flood insurance cost also depends on how much coverage you get. NFIP policies have maximum coverage limits of $250,000 for the dwelling and $100,000 for personal property. If you need to go higher, you could get a flood insurance policy from a private insurer. You could also get an NFIP policy with a private flood insurance policy for excess coverage, explains Stillwell.

However, if you want lower insurance costs, choose lower coverage limits.

“As opposed to home insurance, for flood insurance you can choose a coverage limit that is lower than the value of your home. This is because floods generally damage only a portion of your home,” says Stillwell. “But careful not to go too low; you want to be adequately covered. Plus, if flood insurance is required by your mortgage lender, they will require a minimum coverage limit.”

What companies offer flood insurance in California?

California homeowners can buy a flood insurance policy in three ways: 

  1. Purchase an NFIP flood insurance policy directly through an insurance company or independent insurance agent — often your existing home or auto insurer.
  2. Many well-known private insurers also participate in the NFIP’s Write-Your-Own (WYO) flood insurance program, which means you can buy an NFIP policy that’s serviced by these private insurers as if it were their own product.
  3. Private flood insurance companies also offer policies. These can be purchased as an alternative to NFIP policies, which may help you to get the cheapest flood insurance in California by shopping around, or you might buy a private policy to supplement your NFIP policy.

Some of the best flood insurance companies out of the 18 in California that offer policies through the NFIP’s Write-Your-Own program include:

  • Allstate
  • The Hartford
  • Philadelphia Insurance Companies
  • PURE Insurance
  • Wright Flood
  • USAA

Additionally, you can purchase private flood insurance through companies such as:

  • Chubb
  • Neptune Flood
  • Palomar

Plus, some companies that participate in the WYO program also sell private flood insurance policies, giving you more options to choose from.

The specific company you choose depends on your goals and coverage needs. You might find the cheapest flood insurance in California by shopping around with private insurance companies. However, you might be more comfortable going through the NFIP, or find that private flood insurance isn’t offered for your home.

If you need higher coverage limits, look to high-value home insurance companies. Chubb has flood insurance limits of up to $15 million in total coverage, which could be helpful to those with expensive California homes.

California flood insurance costs and policy details can vary based not only on the insurer but on your situation. Get flood insurance quotes to see what works best for you.