Extreme Weather, Flood Risk & Insurance: What Clients in the Northeast and Southeast Need to Know

From stronger hurricanes battering Florida to record-breaking rainfall in the Northeast, extreme weather events are becoming both more frequent and notably destructive. According to the National Oceanic and Atmospheric Administration (NOAA), which specializes in weather forecasting and climate monitoring, the U.S. experienced more than 20 separate billion-dollar weather disasters in 2024, including multiple events that impacted our region.

 

This backdrop underscores the importance of understanding the caveats surrounding flood insurance to safeguard your assets. The National Flood Insurance Program (NFIP) is a federal program managed by the Federal Emergency Management Agency (FEMA) that provides flood insurance to property owners, renters and businesses. Special Flood Hazard Areas (SFHAs) are zones that are at high risk of flooding and indicated on Flood Insurance Rate Maps (FIRMs). These zones are subject to specific construction regulations and mandatory flood insurance requirements if you have a federally backed mortgage. However, according to the NC State Center for Geospatial Analytics, more than 84% of flood losses occur outside FEMA’s SFHAs. This means that even homeowners who think they are “safe” remain exposed. As Dana Sutton, flood specialist at our partner agency, National Financial Partners Corp. (NFP), puts it, “The truth is, we are all in a flood zone. If it rains where you live, it can flood.”

 

The U.S. has made significant strides in storm surge modeling, allowing insurers to project inches of inundation with precision. However, rainfall-driven flooding remains much harder to model accurately. These are precisely the events devastating inland communities in New England, the Mid-Atlantic, and across Texas. According to Sutton, “We model really well for storm surge, but we do not model well for rainfall flooding. Unfortunately, rainfall events are most of the flooding losses we see today.”

 

Flood insurance, whether through the NFIP or a private insurer, provides financial protection when disaster strikes. Consider the following:

 

• FEMA’s Flood Insurance Rate Maps identify high risk areas which require flood insurance if you have a mortgage. However, they do not capture all flood-prone areas. As a result, many homeowners often do not carry flood insurance, leaving them financially vulnerable.

 

• There are exceptions even within Special Flood Hazard Areas, which can backfire. FEMA permits requests for a change to the Flood Insurance Rate Map. These processes are referred to as the Letter of Map Amendment (LOMA) and Letter of Map Revision (LOMR). While technically sound, Sutton says these exceptions often reflect resources and advocacy rather than reduced risk: “All a LOMA really does is skirt the system. It doesn’t change anything about your actual risk. It’s just a slick legal means to not be required to insure for flood. Often, more affluent communities with resources can overturn maps by hiring high-end engineering firms. That doesn’t make them safer.”

 

• NFIP covers residential buildings up to $250,000 and residential contents up to $100,000. Alternately, NFIP covers commercial building and contents up to $500,000 each. In addition, there are limits to what NFIP covers, e.g., decks, swimming pools, vehicles, and personal belongings in the basement are not covered.

 

• Standard homeowners’ policies usually do not cover flood damage. Depending on your situation, you may need an alternative or a supplement to an NFIP policy for  mold remediation and certain valuables to protect both property and wealth.

 

• Flood insurance is not one size fits all and it is crucial to align coverage with lifestyle. High net worth families often face unique exposures (e.g., multiple residences, coastal properties, and luxury collections) that require specialized programs from carriers like Chubb, Cincinnati, Berkley One or PURE. Private flood insurance offers higher coverage limits and broader coverage.

 

Rockland Trust is committed to supporting our clients with the increasingly complex and rapidly shifting insurance landscape. Our Personal Property & Casualty Insurance Advisory service will work closely with you to educate and advise you on flood insurance by demystifying terms like LOMA, floodplain management, and Risk Rating 2.0. We identify hidden risks by combining FEMA data with forward-looking rainfall and surge models and continually monitor congressional and regulatory developments that directly affect premiums and coverage. Through collaboration with our trusted partner agency, NFP, we tailor insurance programs to protect homes, valuables, and liability across multiple states and properties. Our goal is to provide peace of mind when disaster strikes and ensure that families are not left vulnerable by outdated maps, misunderstood exceptions, or gaps in traditional homeowners insurance. Please reach out to your Relationship Manager if you have any questions or concerns regarding flood insurance or any other type of insurance coverage.