Michigan Flood Insurance

Experts break down flood insurance costs, coverages, and more.

Written by Meg Stefanac
Written by Meg Stefanac

Financial blogger and business owner, Meg Stefanac, has more than 15 years experience working in the financial services industry and enjoys helping individuals make solid financial decisions. Meg has extensive experience writing about insurance and finances and is a key contributor to TrustedChoice.com.

Flood waters in the midwest. Find Michigan flood insurance.

Flooding can pose a serious problem many parts of Michigan. However, flood damage is excluded from coverage by nearly all home, renters, and business insurance policies. If you own property in Michigan, you may want to give serious consideration to supplementing your coverage with flood insurance.

Local independent agents understand your potential flood threats because they live and work in your community. These agents can help you review flood maps, assess your risks, and, if needed, cover your property with an affordable flood insurance policy. Contact an independent insurance agent near you to get started.

What Is Flood Insurance and Why Is It Important?

Because flood damage can be so expensive and so widespread, many insurance companies stopped including it in their home, renters, and business insurance policies. This caused a problem for many people who had no way to protect their properties from the risk of flood damage.

Fortunately, the National Flood Insurance Program (NFIP) was created in 1968 to mitigate this problem. This program ensures that all property owners have access to guaranteed and affordable flood insurance.

Around 8% of all properties in Michigan have at least a 26% chance of sustaining significant flood damage in the next 30 years.

While this may seem like a low percentage, it constitutes more than 365,000 homes and businesses in the Wolverine State. Surprisingly, only about 23,000 of these at-risk properties are covered by flood insurance.

Many people think that if they live outside of designated flood zones, they do not need to worry about this hazard. However, this is not always the case. In fact, FEMA reports that nearly 20% of all flood claims filed are for properties that are situated in low- or medium-risk areas.

By purchasing a flood insurance policy, you do not need to worry that a flash flood in your area will cause you large financial losses.

Is Flood Insurance Required in Michigan?

Flood insurance is not required by law. However, if you are still paying on a mortgage or have taken out a home equity loan, your lender will most likely require you to carry flood insurance if your property is located in a FEMA-designated flood zone.

For properties that are owned outright with no liens against them and those that have a low risk of sustaining flood damage, flood insurance is completely optional.

How Much Does Flood Insurance Cost in Michigan?

The average cost of flood insurance in Michigan is $1,054 a year. 

One reason the average cost is so high is that most policies in this state are purchased by people who live in high-risk flood zones. If every property owner carried a policy, the average rate would be much lower. Rates are based on factors like the following.

  • Details about your property including its age, value, style, and elevation
  • Your property’s flood risk according to a FEMA-drawn flood map
  • How much structural coverage you need
  • How much property (contents) coverage you need

As is to be expected, a flood insurance policy for a property located in a high-risk flood zone will cost considerably more than one for a property in a low-risk area.


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What Does Michigan Flood Insurance Cover?

Flood insurance is made up of two parts: structural coverage and contents coverage. You can choose coverage limits for each category according to your specific coverage needs.

For instance, a renter may only need to purchase contents coverage, while a homeowner may want full structural coverage, but only enough contents coverage to cover property on the first floor of the home.

Policies through the NFIP cap coverage limits differently for individuals and businesses.

  • Structural coverage: This pays to repair damage to the structure of your property, including its foundation, water heaters, plumbing systems, electrical systems, and HVAC systems.
    • Homeowners may purchase up to $250,000 in structural coverage.
    • Businesses may purchase up to $500,000 in structural coverage.
  • Contents coverage: This pays to repair or replace damaged property in the insured structure.
    • Homeowners may purchase up to $100,000 in contents coverage.
    • Businesses may purchase up to $500,000 in contents coverage.

Flood policies take 30 days to go into effect, so it is important that you purchase your coverage long before severe storms and heavy rains are imminent.

What Is Not Covered by Michigan Flood Insurance?

As with any type of insurance policy, flood insurance has some limitations. For instance, you should not expect your policy to cover the following risks.

  • Damage caused by earth movement like landslides
  • Mold, mildew, or moisture clean up
  • Personal property kept in a finished basement
  • Damage to property kept outside your home including things like hot tubs, decks, swimming pools, and landscaping features
  • Loss or damage to currency, precious metals, or important papers
  • Temporary living expenses for homeowners who must leave their homes while repairs are made
  • Revenue losses experienced by businesses that need to close while repairs are made
  • Damage to your vehicle (this can be covered by comprehensive car insurance coverage)

It is important to be aware of what your policy will and will not cover so you do not find yourself facing any unexpected surprises when you file a claim.

Why Work with an Independent Agent in Michigan?

If you are considering covering your property with flood insurance, you can turn to a local independent agent for guidance and advice. These agents can answer your insurance-related questions, help you review your property’s flood risk, and, at your request, assist you with finding an affordable policy.

It doesn’t cost anything to work with an independent agent. Arrange an obligation-free consultation with an experienced insurance agent near you to learn more about Michigan flood insurance.

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