Everything You Need to Know About Flood Insurance in Michigan

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If you live in a FEMA-designated high-risk flood zone in Michigan, you might be required to find a flood insurance policy to satisfy your mortgage lender’s requirements. 
What’s one of the most common things that homeowners don’t realize until it’s too late? A standard home insurance policy typically doesn’t cover flood damage. You usually have to buy a separate flood insurance policy for adequate protection. 
With the right flood insurance policy, you can save thousands if flooding does occur in your neighborhood.
While certain areas might have higher flood risks, flooding can happen anywhere—which means it’s important to understand how flood insurance works in your state. That’s why home and auto insurance comparison app Jerry is here to tell you what you need to know about flood insurance in Michigan. Read on to learn more about what flood insurance is, what it covers, what it costs, and how to save on both flood and auto insurance.
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What is flood insurance?

Flood insurance is a kind of property insurance that offers financial protection against water damage caused by flooding.
A standard homeowners insurance policy might cover water damage when the source of water has come from inside your home, like if a pipe in your house were to burst. However, it rarely provides coverage if the source of water is from outside your home. For protection against flood damage, you’ll usually have to get a separate flood insurance policy.
If your home or possessions were ever damaged in a flood, not having the proper flood insurance coverage could mean you’re on your own for thousands of dollars worth of repairs and replacements.

What does flood insurance cover?

At its most basic level, flood insurance is what it sounds like: coverage for damage caused by flooding
There are two types of flood insurance coverage: building coverage and contents coverage. Building coverage offers financial protection for your house itself, and contents coverage protects your personal belongings inside your home. 
In combination, these two coverage types will cover electrical and plumbing systems, detached garages, appliances, clothing, carpets, cabinets, valuables, and more.
Still, there are some things a flood insurance policy won’t provide coverage for. Some of these items include additional structures like decks, patios, fences, and swimming pools. It also won’t cover septic systems or belongings kept in basements or cars
Additionally, flood insurance doesn’t include loss of use coverage, which helps cover living expenses while your home is temporarily uninhabitable.
The cause of flooding also has an impact on whether or not your policy will give you coverage. The Federal Emergency Management Agency (FEMA) defines flooding as “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.”
For example, if your house experienced a sewer backup, this would only be covered by flood insurance if the backup was caused by flooding.
Here’s a more detailed look at what is and isn’t covered by both types of flood insurance coverage:
Type of coverageWhat it coversWhat it doesn’t cover
BuildingWater heaters and furnaces Electrical and plumbing systems Appliances like dishwashers or refrigerators Permanently installed paneling, bookcases, and cabinets Foundational walls, staircases, and anchorages Permanently installed carpets Window blinds Detached garages Fuel tanks, solar panels, and well water tanks/pumpsDecks and patios Swimming pools and hot tubs Fences and landscaping Septic systems
ContentsFurniture Electronics Clothing Washing machines and dryers Microwave ovens Valuables (such as artwork) up to $2,500 Curtains Portable or window air conditioners Carpets not included in building coverage Valuable papers, including stock certificates Currency Precious metals Belongings stored in a basement Vehicles and their parts
If you have questions about specific items or structures being covered under flood insurance, your insurance agent should be able to answer them for you.

Do you need flood insurance in Michigan?

It’s not required by law in Michigan to have flood insurance, but your mortgage lender might require you to have it.
If you’ve purchased a home in an area with a moderate to high flood risk and are using a federally-backed mortgage, you’ll be required to get flood insurance. A private mortgage lender might require you to do so in this case, too.
You can find a flood insurance policy through FEMA’s National Flood Insurance Program (NFIP) or a private provider. The NFIP itself doesn’t provide flood insurance, but it can help you find an NFIP-backed provider in your area. 
To find a flood insurance policy backed by the NFIP, you’ll have to live in a participating Michigan community. If you discover that your community isn’t on the list, however, there are still private provider options available.
Even if your mortgage lender isn’t requiring you to get flood insurance, it’s still a good idea to consider it. Storms with heavy rains or broken water mains can happen nearly anywhere, and when events like this happen, flood insurance can end up saving you thousands.
As a matter of fact, from 2014 to 2018, more than 40% of NFIP claims were properties that were outside of FEMA’s high-risk flood zone areas.

What flood zones require flood insurance in Michigan?

FEMA-designated high-risk flood zones will begin with the letter A or V. If you’re buying a property in one of these zones, you will be required to purchase flood insurance to use a federally-backed mortgage.
Moderate- to low-risk flood zones are graded B, C, D, or X. However, these designations don’t mean your property won’t ever experience flooding—one in three flood insurance claims come from low- to moderate-risk areas.
In Michigan, the city with the most properties at risk of flooding is Detroit, with nearly 40,000 or 10% of properties at risk.
You can use FEMA’s Flood Map Service Center or Flood Factor® to find out your area’s risk for flooding. 
Key Takeaway If you have a federally-backed mortgage and live in a designated high-risk flood zone, you’ll be required to have flood insurance.

How much does flood insurance cost in Michigan?

For Michigan residents, flood insurance costs about $1,061 per year on average, or about $88 per month. That’s higher than the national average cost of flood insurance of $739 per year
Coverage limits for homeowners are $250,000 for building coverage and $100,000 for contents coverage. Your provider might also establish a deductible limit on your flood insurance policy. 
Changes are on the horizon when it comes to future flood insurance costs. In October 2021, FEMA instituted a new methodology called Risk Rating 2.0, which it says is aimed at more equitable flood insurance pricing.
To determine a property’s flood risk, Risk Rating 2.0 will look at factors like a property’s flood history, cost to rebuild, distance from a water source, risks for different types of floods, and property characteristics (like elevation and soil type).
The new pricing system went into effect for policyholders on October 1, 2021, and for existing policyholders, changes will be effective April 1, 2022.
Roughly 53% of flood insurance policyholders in Michigan are expected to see decreases in their flood insurance costs. About 44% of Michigan policyholders are expected to see an increase in coverage costs of $10 or less per month.

How to save money on flood and auto insurance in Michigan

Even if you don’t live in a flood zone, flood insurance protection could save you thousands of dollars if your neighborhood were to ever experience a flood. 
If you’re looking to save on a flood insurance policy in Michigan, here are a few options to consider:
It’s also important to know that flood insurance won’t cover damage to your vehicle—your car insurance policy will have to cover that. If you need a new car insurance policy, the Jerry app can help you find it!
If you’ve never used Jerry before, here’s how it works. After downloading the app and answering a few questions, Jerry will present you with insurance quotes from top insurance providers. From there, you can pick the right policy for you at the right price.
That’s not where Jerry’s service stops, though. The Jerry app offers end-to-end support that can help you set up your new policy and even help cancel your old one. That support also includes answering your questions about coverage, including flood damage. 
Getting started takes less than a minute, and Jerry users save an average of $887 per year on car insurance alone!
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