When Hurricane Helene brought catastrophic flooding across North Carolina in late 2024, thousands of homeowners discovered their policies didn’t cover the damage. The storm caused billions in losses, yet the majority were uninsured, echoing a pattern we’ve seen after nearly every major flood event.
Flooding is the most common and costly natural disaster in the U.S., involved in 90% of natural disasters. And still, only about 4% of U.S. homeowners carry flood insurance. As an agent, what does that mean for you? Let’s dig in.
What Do the Numbers Tell Us About Flood Insurance Trends?
The flood insurance landscape is shifting on multiple fronts, so it’s in your best interest to understand not only the numbers but also the underlying forces behind them. Current data points to several overarching trends shaping the market:
- Private market growth: Private residential flood policies have been expanding at a 20% annual growth rate since 2020.
- National Flood Insurance Program (NFIP) participation decline: NFIP policies have dropped from 5.7 million in 2009 to under 5 million as of 2021.
- Coverage gap persists: Floods caused $144 billion in damage between 2010–2023, with only $50 billion insured, just 35%.
- Technology reshaping risk: Advances in analytics and flood mapping are enabling insurers to better segment and price flood exposure.
A Peek into the Private Flood Market
Agents often ask why the private flood market has seen such momentum in recent years. The answer lies in a combination of regulation, innovation, and demand. The NFIP remains the dominant provider, but its $250,000 residential limit often leaves property owners underinsured. Legislative changes now require lenders to accept comparable private flood policies, and private carriers can offer higher limits and more tailored coverages.
Drivers of private flood market expansion include:
- Improved modeling and analytics
- Easier availability and awareness of need for flood coverage, given recent events
- Regulatory changes encouraging private competition
- Support from reinsurers and Lloyd’s syndicates, adding capital and expertise
- Lender requirements in high-hazard flood zones
- Higher limits available in a single policy vs. NFIP
- Enhanced coverage options not available in NFIP
For agents, this expansion means greater flexibility in designing policies that truly reflect client needs. Private markets can offer broader coverage, like basement contents, loss of use, and replacement cost, that NFIP often excludes.
How Climate Change is Reshaping Flood Risk
Climate change is already baked into the numbers, and into client risk profiles. Storms are wetter, slower, and more destructive. Flooding in Texas in 2025 generated $18–22 billion in economic losses, most of it uninsured. The bigger challenge for agents is that official flood maps don’t always tell the full story:
- FEMA maps underestimate inland flooding, leaving 400,000+ homes underinsured in the southeast and central southwest.
- Borrowers in these inland areas often have lower incomes and fewer resources to recover.
- Even outside FEMA-designated zones, properties face meaningful flood risk. 25% of NFIP claims come from outside “high-risk” areas.
For agents, this means proactive education is key: if your clients are relying solely on FEMA maps, they may be vastly under protected.
How Agents Can Prepare Clients for 2026
Preparing clients for 2026 starts with translating trends into actionable advice. Here’s a practical checklist you can use to guide conversations, so no detail gets overlooked:
- Offer flood coverage to all clients, not just those in FEMA flood zones.
- Compare NFIP, private, and parametric options to find the best fit.
- Highlight coverage gaps such as contents, basements, and business interruption.
- Leverage analytical tools to explain specific property risks.
- Track NFIP legislation and communicate changes to clients.
- Promote resilience measures like stronger building codes and green infrastructure.
FAQ: Flood Insurance Questions Agents Might Hear
Clients will inevitably come with questions—often the same ones you hear again and again. Be ready with clear, confident answers.
Q: Why consider private flood insurance if NFIP exists?
Private options can provide higher limits, broader coverage, and competitive pricing.
Q: Does flood insurance matter outside high-risk zones?
Yes. Inland areas face increasing exposure, and over 25% of NFIP claims occur outside FEMA zones.
Q: Will NFIP still be around in 2026?
Yes, but its financial stability and long-term design remain uncertain due to repeated short-term extensions.
Jencap’s Role in Navigating What’s Next
Flood insurance is entering a new era. Between private market growth, NFIP uncertainty, and climate-driven losses, agents are on the hook for accurate information and guidance. But this isn’t something you have to face alone. Jencap’s personal lines flood specialists can help you with the most complex of client scenarios.
Close the protection gap, build client trust, and stay ahead of what’s coming in 2026 and beyond. Connect with Jencap’s Personal Lines group today to learn how we can help you deliver smarter, stronger solutions.
