# Why is flood insurance separate from homeowner/renters insurance? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 31, 2017, 12:14am UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137 "2017-08-31T00:14:53Z")\ **Posts on this page:** 16\ **Page:** 2
**Author:** ![SamuelA](https://avatars.discourse-cdn.com/v4/letter/s/c77e96/32.png) [@SamuelA](https://boards.straightdope.com/u/SamuelA)\ **Post date:** [August 31, 2017, 2:14pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/21 "2017-08-31T14:14:28Z")
> [@Quimby](#): > > Because Insurance companies lobbied the people that make the rules to make it something separate. Flood damage is expensive and the companies didn’t want to be liable for it. Which is why I compared it to health insurance that doesn’t cover heart disease. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [August 31, 2017, 2:19pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/22 "2017-08-31T14:19:43Z")
> [@Quimby](#): > > Because Insurance companies lobbied the people that make the rules to make it something separate. Flood damage is expensive and the companies didn’t want to be liable for it. Um, no. Flood coverage was never a mandated part of home insurance. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [August 31, 2017, 2:33pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/23 "2017-08-31T14:33:19Z")
> [@SamuelA](#): > > Which is why I compared it to health insurance that doesn’t cover heart disease. Heart disease doesn’t impact a huge number of people that were otherwise healthy in a single event at a single location. Natural disasters (like floods, hurricanes, and earthquakes) are qualitatively different than fires, accidents, and break-ins. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [August 31, 2017, 2:36pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/24 "2017-08-31T14:36:00Z")
> [@SamuelA](#): > > It has occurred to me that ‘insurance’ that doesn’t cover a major, known uncontrollable risk is not a good policy to have. Selling insurance that excludes floods is comparable to being permitted to sell health insurance that excludes heart conditions. Or, in other words, a piece of paper of dubious worth in exchange for the insurance premiums. > > Why do state governments allow the insurance agencies to get away with this? If the risk of flooding was explicitly itemized in an insurance premium, home buyers would avoid flood prone areas, as they should. Because no insurance company would offer flood insurance at an affordable rate. States ultimately do what the insurance companies want-otherwise the companies leave and business/real estate stops. The insurance companies took out the flood protection in order to continue selling in the state. It didn’t matter to them-they were still selling a product that people have to have. The federal Government stepped in because no other entity would supply the product-at least in the areas that need it the most. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [August 31, 2017, 2:58pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/25 "2017-08-31T14:58:58Z")
> [@puzzlegal](#): > > Historically, the private insurance market didn’t insure floods because all the houses flood at the same time, and the company wouldn’t be able to pay. > > The federal flood insurance program is expiring, and up for renewal. I’m sure this storm will affect the conversion in Congress. It expires in Sept. One of the issues that Congress has to deal with when they get back to DC. And the chairman of the House committee in charge is a Dallas TX republican who is adamantly opposed to the current setup and wants to impose the kind of changes talked about in this thread. He is opposed by just about everyone outside of the arch-conservatives. But he claims to have the support of the entire Texas delegation. I wonder about that now. He is term-limited as chairman. His opponents are just trying to hang on until he is off the chair and are pushing a more helpful person for the next chair. But the problem is that something must be done in Sept. The hope/expectation that in spite of the Chair, there will be a simple continuation of the program for one more year. And of course he is trying to get his policy enacted before he leaves the chair. Interesting times. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [August 31, 2017, 4:28pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/26 "2017-08-31T16:28:35Z")
An article in the Economist this week, discussing some of the issues that have been raised in this thread. I think this is open access: > **[How government policy exacerbates hurricanes like Harvey](https://www.economist.com/leaders/2017/09/02/how-government-policy-exacerbates-hurricanes-like-harvey?cid1=cust%2Fednew%2Fn%2Fbl%2Fn%2F20170831n%2Fowned%2Fn%2Fn%2Fnwl%2Fn%2Fn%2Fuk%2F60235%2Fn)** > > As if global warming were not enough of a threat, poor planning and unwise subsidies make floods worse > [@](#): > > …America has the opposite problem—the federal government subsidises the insurance premiums of vulnerable houses. The National Flood Insurance Programme (NFIP) has been forced to borrow because it fails to charge enough to cover its risk of losses. Underpricing encourages the building of new houses and discourages existing owners from renovating or moving out. According to the Federal Emergency Management Agency, **houses that repeatedly flood account for 1% of NFIP’s properties but 25-30% of its claims. Five states, Texas among them, have more than 10,000 such households and, nationwide, their number has been going up by around 5,000 each year. Insurance is meant to provide a signal about risk; in this case, it stifles it.** ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [August 31, 2017, 4:52pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/27 "2017-08-31T16:52:13Z")
> [@Procrustus](#): > > Federal insurance also only covers about $250,000 and sucks for contents, etc. It’s mostly to protect mortgage holders. I had to buy private flood insurance to actual protection for my residence and contents. About $4,500 per year ☹ And that’s just for supplemental coverage; hence the point about how expensive flood insurance is when actuarially priced. There’s no distinction in the federal flood policy between protecting the mortgage vs. the residence. I assume you mean that it doesn’t cover the whole value of your home? The federal insurance provides contents coverage up to $100,000 (with vehicles and high-value jewelry and collectibles excluded). I can imagine that that amount gets eaten up quickly in a major disaster. ---
**Author:** ![Quimby](https://avatars.discourse-cdn.com/v4/letter/q/22d042/32.png) [@Quimby](https://boards.straightdope.com/u/Quimby)\ **Post date:** [August 31, 2017, 7:42pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/28 "2017-08-31T19:42:46Z")
> [@Doctor\_Jackson](#): > > Um, no. Flood coverage was never a mandated part of home insurance. Didn’t you just prove my point? ---
**Author:** ![vtxrider](https://avatars.discourse-cdn.com/v4/letter/v/d26b3c/32.png) [@vtxrider](https://boards.straightdope.com/u/vtxrider)\ **Post date:** [August 31, 2017, 8:49pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/29 "2017-08-31T20:49:35Z")
So I guess the answer is, if you think your house will get flooded and you do not have flood insurance, just set fire to it and let your insurance pay for it burning down. 🙂 ---
**Author:** ![Chefguy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chefguy/32/138_2.png) [@Chefguy](https://boards.straightdope.com/u/Chefguy)\ **Post date:** [August 31, 2017, 11:19pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/30 "2017-08-31T23:19:19Z")
> [@rbroome](#): > > Because no insurance company would offer flood insurance at an affordable rate. States ultimately do what the insurance companies want-otherwise the companies leave and business/real estate stops. The insurance companies took out the flood protection in order to continue selling in the state. It didn’t matter to them-they were still selling a product that people have to have. The federal Government stepped in because no other entity would supply the product-at least in the areas that need it the most. It’s the same for earthquake coverage, although I don’t know if the government will provide it. ---
**Author:** ![tonyfop](https://avatars.discourse-cdn.com/v4/letter/t/85f322/32.png) [@tonyfop](https://boards.straightdope.com/u/tonyfop)\ **Post date:** [August 31, 2017, 11:35pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/31 "2017-08-31T23:35:26Z")
> [@ZipperJJ](#): > > It is kind of weird that they take the time to value out your house so that it may be replaced completely if it burns to the ground. > > But if a flood comes and your house needs to be replaced well that’s too bad. Didn’t read the whole thread, but when one house burns down it is just that, one house. If Houston is flooded, even if there are 10 insurance companies, that’s hundreds of thousands of houses per company. Look, now no-one’s insured because all of the insurance companies are bankrupt! ---
**Author:** ![puzzlegal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puzzlegal/32/3827_2.png) [@puzzlegal](https://boards.straightdope.com/u/puzzlegal)\ **Post date:** [September 1, 2017, 3:02am UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/32 "2017-09-01T03:02:11Z")
> [@Quimby](#): > > Because Insurance companies lobbied the people that make the rules to make it something separate. Flood damage is expensive and the companies didn’t want to be liable for it. Except that the companies didn’t have to lobby, flood has never been part of homeowners. Historically, there were a lot of separate coverages. You could buy a fire policy, a wind policy, and a theft policy, for instance. Flood and earthquake were considered uninsurable, and those policies weren’t generally offered at all. At some point, insurance companies started bundling a bunch of coverage together into “homeowners”, but the excluded coverages that no company wanted were never included in the bundle. Earthquake is now available as an add on, but it’s very pricy. If it weren’t for NFIP, flood would likely be the same. ---
**Author:** ![Okrahoma](https://avatars.discourse-cdn.com/v4/letter/o/90db22/32.png) [@Okrahoma](https://boards.straightdope.com/u/Okrahoma)\ **Post date:** [September 1, 2017, 3:15am UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/33 "2017-09-01T03:15:10Z")
> [@vtxrider](#): > > So I guess the answer is, if you think your house will get flooded and you do not have flood insurance, just set fire to it and let your insurance pay for it burning down. 🙂 > **[Flooded home destroyed by fire in Katy area](https://abc13.com/house-fire-flood-katy/2362395/)** > > A house surrounded by floodwater has now been destroyed by fire. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 1, 2017, 4:19am UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/34 "2017-09-01T04:19:18Z")
> [@puzzlegal](#): > > Earthquake is now available as an add on, but it’s very pricy. If it weren’t for NFIP, flood would likely be the same. In CA, all earthquake insurance is through the state, for much the same reasons described for flood. Fire following earthquake is covered by regular home policies. The old joke is that if there is an earthquake, tip over your water heater to cause a gas fire. That would be fraud so I wouldn’t recommend that. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [September 1, 2017, 3:48pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/35 "2017-09-01T15:48:09Z")
Everything we’re saying about flood insurance applies equally to hurricane wind coverage. It’s not affordable on an actuarially valid basis, so the relevant state governments provide some sort of loss pool. And rely on commercial insurers to administrate the programs. ---
**Author:** ![Buttercup\_Smith](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/buttercup_smith/32/473_2.png) [@Buttercup\_Smith](https://boards.straightdope.com/u/Buttercup_Smith)\ **Post date:** [September 1, 2017, 4:14pm UTC](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137/36 "2017-09-01T16:14:13Z")
I live in a hurricane zone and have to buy flood, wind and homeowners. It is not cheap but the flood is the cheapest of the three as I live in a stilt house. Wind is the expensive one. All three are about $5K per year. [Previous page](https://boards.straightdope.com/t/why-is-flood-insurance-separate-from-homeowner-renters-insurance/795137.md?page=1)