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How to Budget for Flood Insurance Costs With Your Mortgage

Most people don’t spend time thinking about floods. The truth is though, they cause hundreds of deaths every year. They are also responsible for ruining millions of homes.

Even if don’t live somewhere that’s considered “flood-prone”, you never know when heavy rains can lead to a flash incident that could leave you liable for thousands of dollars worth of property repairs.

Avoiding falling victim to the aftermath of flooding is why flood insurance is so important. The added expense insurance represents to policyholders however, may be more than some are prepared to deal with.

To make sure that flood insurance costs don’t break your bank account, below, we go over practical steps and considerations that will help you find the best policy at the best price.

Understand What You Can Afford When Considering Your Mortgage

Most people look at their home’s monthly mortgage and its required insurance as one expense. According to financial experts, that expense should not exceed 30% of your monthly household income.

If you’re finding that your mortgage expenses without insurance factored in already exceed 30% of your income, you may want to consider bringing down your mortgage costs by refinancing your home with a different lender or switching your mortgage term from 15-years to 30-years (if applicable).

If your mortgage comes in under 30% of your monthly income, find out how much wiggle room you have for insurance. For example, let’s sat you spend $1100 per month on your mortgage and that number represents 25% of your household income. You’d have about $220.00 a month (an additional 5% of your income) to comfortably budget for flood insurance.

Start Shopping

Once you have an idea of what you can afford when it comes to flood insurance costs, it’s time to find a policy. There are a couple of places that you can start your search.


Many cities have local insurers that will sell you flood insurance policies. This is particularly true in areas that are flood-prone.

Take a moment to see what’s available to you in your vicinity to get a feel for what you should expect to pay.


You can learn more about and purchase flood insurance 100% online. This is an effective insurance buying strategy whether you live in a mountain state like Colorado or a waterfront state like Louisiana.

Always Vet Policies and Providers Before Doing Business

It’s important to note that not all insurance providers are created equal. We’ve heard a number of horror stories where people have purchased flood insurance policies from less than reputable agencies only to find that their coverage was not there for them when they needed it.

Furthermore, even if you budget enough for flood insurance costs to buy from a known provider, it’s important to not assume that the particular policy you’re getting is comprehensive.

Many insurers offer different tiers of flood insurance that cover to different degrees. If your coverage is comprehensive, you’ll pay more monthly but can claim more for damages. If your coverage has gaps, you’ll pay less monthly.

All of that to say that you need to know exactly what you’re getting into before finalizing your coverage.

On Average, How Much Does Flood Insurance Cost?

This is one of the most common questions that we get because insurance shoppers want to know if the prices they’re finding are reasonable. The problem is, there is no singular average when it comes to flood insurance policies.

Flood insurance costs range wildly depending on where you live and how liable that area is to flood. Our advice is to engage multiple insurers that do business in your state. By comparison, you’ll be able to deduce what constitutes a good deal and a bad one.

How Can You Bring Down the Cost of Flood Insurance?

After you’ve budgeted and shopped around for policies in your area, you may be finding that solid flood protection is outside of what you can comfortably afford.

To potentially bring down your premiums, consider migrating your living area and important property to a higher floor.

If you have bedrooms, utilities, and valuables below ground-level in your house (in a basement for instance) insurers will charge more because anything below ground level stands a higher chance of incurring flood damage.

If migrating your living space upwards doesn’t bring down your policy’s costs, there’s always the option of moving to a less flood-prone area.

Moving is never something people want to be forced into. Unfortunately, choosing to live in a flood-prone area without good insurance is the worst decision you can make.

Floods may seem like an impossibility. You never know though when you’re suddenly going to be one of the millions of people that lose everything to one.

Wrapping Up How to Budget for Flood Insurance Costs with Your Mortgage

Considering how much you’re paying towards your mortgage and using that number to determine how much you can spend on flood insurance costs is a cumbersome but necessary process.

You’ll want to make sure that you protect your family and your belongings by picking up a policy that is as comprehensive as your budget will allow. Only then can you rest easy knowing that you’ll be able to pick up the pieces if a flood should strike.

Are you looking to upgrade your existing home locally? Do you want out of a flood plain? If so, our team at Sky Five Properties has you covered.

Check out our extensive inventory of homes, condos and more today!


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: