August has arrived, bringing with it summer vacations, impressive heat — and the peak of hurricane season. 

From now until October, New York City faces its highest annual risk of hurricanes, bringing the threat of flooding from both coastal surges of ocean water and, increasingly, from intense, sudden rainfall known as cloudbursts. 

Already this summer, the city has seen water overwhelm subways, highways and streets after just an afternoon’s downpour. 

Yet as climate change warms the atmosphere, allowing it to hold more moisture and threaten more homes with flooding, few city residents have an insurance policy specifically for flooding — often the only way to recoup damages when properties fill with water from thunderstorms, rising rivers and swelling oceans.

Now, the Federal Emergency Management Agency, which administers a national flood insurance program, is pushing Americans to buy those policies, warning of the increasing risks to homes and minimal disaster-related government grantmaking as it tries to make the program financially solvent. 

“There’s an underappreciation for flood risk, and not a clear understanding of the damage that can be caused by even a small flooding event,” said David Maurstad, FEMA’s deputy associate administrator for flood insurance. “So we’ve got a lot of work to do.”

Here’s what you need to know about flood insurance ahead of this year’s height of storm season.

I have homeowners or renters insurance. Am I covered?

Likely not. Very few homeowners or renters insurance policies cover damages to physical structures or belongings from weather-related flooding. 

If you assumed you were covered for flooding from your existing policy, you’re not alone: In 2020, about a quarter of surveyed homeowners told the Insurance Information Institute, an industry research association, that they had insurance protection against flooding — a proportion that far outstripped coverage numbers reported by insurers. 

“This might indicate that consumers think they have flood coverage when they do not,” the institute concluded. 

However, if you live in a FEMA-designated flood zone — typically areas along coasts and rivers that see routine flooding — and you have a federally backed mortgage, you are required to have a policy with the agency’s National Flood Insurance Program. 

In New York City, 53,346 homes have such policies, with most coming from Queens and Brooklyn. In contrast, the city recently estimated that about 8,000 homes are at risk of inland flooding alone based on storms that bring two inches of rainfall in under an hour. Few of these homes are required to have flood insurance policies.

For context: On July 18, more than three inches of rain fell in less than an hour in the Bronx. 

How do I get flood insurance, and what does it cover?

There are two ways to get flood insurance in the U.S.: Getting a policy through a private insurer (Zurich Insurance Group and AIG write the most such policies) or getting insured through the National Flood Insurance Program from FEMA. 

Private insurers administer the FEMA’s program; to get a quote, Maurstad suggests calling your insurance broker for your homeowners policy and seeing if they are part of the program. 

The program covers damage to both physical structures and belongings — but only if they are stored at the first level or higher. Items left in the basement will likely not be eligible for coverage. 

In terms of maximum payouts, homes for families of up to four can see up to $250,000 in one-time payouts for physical structure damages, and $100,000 for a home’s contents. The program has no lifetime maximum payout limits. 

And even if you sign up for flood insurance today, be warned: There is a 30-day waiting period before the policy kicks in. 

What are the costs?

This year, FEMA changed its rating methodology for the flood insurance program, a controversial move that raised premiums for some — in some cases more than doubling annual payments — while bringing costs down for about a quarter of enrolled households. 

The change had many motivating factors: FEMA’s program has been billions in debt for years; the new rating system was meant to close the financial gap. It also now estimates costs based on a wider range of factors: Whereas before the program assessed risk primarily on whether or not a home was in a coastal floodplain, now it takes into consideration home value, local topography, the home’s elevation and risk from many other kinds of flooding. 

Now, average annual premiums for single-family homes are $648, FEMA says, and $919 for two- to four-family structures. For high-value homes in the white-hot real estate market of New York City, however, those prices could be higher, given the greater importance of home value in FEMA’s new risk rating scheme. 

FEMA says that the costs are worth it, because just one inch of floodwater can cause tens of thousands of dollars of damage. The program also caps annual increases at 18% — by no means at the rent-stabilized levels New Yorkers may be used to, but still, FEMA argues, an important affordability check. 

These premiums seem expensive. Won’t the federal government give me a grant if I’m in a major disaster area?

FEMA is well aware of the high costs of its insurance program, Maurstad said. 

“There is an affordability issue here,” he said. “There was one last year, five years ago, and 10 years ago.”

FEMA is asking Congress to codify discounts for low- and moderate-income families when legislators re-authorize the program this fall.

As far as grants: After Hurricane Ida, which led to 13 drowning deaths in the five boroughs and flooded countless basements across the city, President Joe Biden made an emergency declaration that ultimately allowed homeowners to apply for up to $36,000 in federal grants. 

In practice, however, that program had fatal flaws, residents say. In many cases, their costs ran far higher, while at the same time they were paid a fraction of that amount. Some homeowners who did receive such grants also sought interest-free loans from the Small Business Administration; their FEMA grants were then automatically applied to the loan balance, evaporating the funding and requiring many to dip deep into their life savings. 

In contrast, flood insurance can be a better value proposition — but the new risk rating program, while opaque, may not price New York City homes fairly, said Upmanu Lall, the director of Columbia University’s Water Center and a professor of engineering. 

That’s because FEMA’s own maps do not have accurate models for risks to inland neighborhoods from intense rainfall, meaning that, in the absence of solid data, insurers may require outsize premiums. 

“We know those people have a flood risk,” Lall said. “If they’re going to buy flood insurance at market prices, they’re screwed.”

I can’t afford this flood insurance. What else can I do?

Flood insurance is not financially feasible for everyone, despite the potential costs for repairing a severely flooded home, Lall said. There are few options. 

First, know your expected risk. The city released a new map this year that models risk of inland flooding across the city. Check here if your home is in a high-risk area. 

Residents should also get proactive about the typical issues that can clog sewer grates and lead to street flooding, Lall said. He and his neighbors now coordinate complaints to the city, via the 311 program, about clogged storm drains and concerns about other sewer blockages. 

The city itself is encouraging neighborhoods to clean their own storm drains when they can. Some homes are also eligible for free inflatable dams that can block water from entering a driveway or spilling into a basement window through a new city program. The city is also asking homeowners who are not eligible for the free dams to buy their own. 

Ultimately, Lall said, homeowners need to push the city to move faster on its commitments to mitigate inland flooding risk. 

“Homeowners need to be pushing for the city to solve that issue because they can't be expected to cover that risk, which is created by the city,” he said.