How much does commercial flood insurance cost?

What businesses paid for NFIP flood policies in 2025

We found no FEMA-published average flood premium for businesses, but FEMA does release the records behind its policies. Its OpenFEMA dataset lists each NFIP policy transaction, with personal details removed, along with the occupancy, coverage, flood zone and total cost⁠¹. We downloaded every record coded as a Risk Rating 2.0 non-residential occupancy with an effective date in calendar 2025. These are occupancy codes 17 (non-residential manufactured home), 18 (non-residential building) and 19 (non-residential unit in a multi-unit building)⁠¹.

We took the records from FEMA’s v3 API; every record carries an as-of date of September 8, 2026. That gave 245,371 records. We dropped the 8,707 that had a cancellation date, which left 236,664 policies. We then took the median and mean of the policyCost field. FEMA defines that field as the premium plus the reserve fund assessment, the federal policy fee and the HFIAA surcharge⁠¹. So the figure is the full amount a business is billed, not just the risk premium.

The mean is about 52% above the median (our calculation). A long upper tail pulls the mean up: the top tenth of policies cost over $7,030. For a typical business, the median is the more useful figure.

Three limits on this data:

• It is not an official FEMA statistic. FEMA says the dataset “is not intended to be an official federal report”⁠¹. The figures above are our arithmetic on FEMA’s records.
• The records are transactions. We found 8,739 extra records that repeat another record’s ZIP code, coordinates (as rounded by FEMA), dates, coverage amounts and cost. Some are probably separate buildings with one owner, and some may be repeat entries. If each identical group is counted once, the median becomes $2,187 and the mean $3,305 (our calculation). The headline figures do not depend on how those records are treated.
• The v2 dataset is being retired. An earlier pull of the same records from FEMA’s v2 endpoint gave 237,385 policies, a $2,165 median and a $3,282 mean. FEMA’s data catalog sets October 15, 2026 as the deprecation date for v2, so “NFIP Redacted Policies v3” is the version to use from now on⁠². Our v3 recount agrees with the v2 figures to within $2 on both median and mean.

Why one building costs $900 and another $7,000

The size of the policy matters most. The NFIP prices coverage per $1,000 of insurance⁠⁴, so a $500,000 building policy costs more than a $100,000 one on the same site. About half of the 2025 policies (50.4%) carried the maximum $500,000 of building coverage. About 11% insured contents only (our calculation from FEMA records)⁠¹.

Scroll the table sideways to see every column.

Location matters next. Under Risk Rating 2.0, FEMA prices each building on its own flood risk. That risk depends on how often floods occur and of what type (river overflow, storm surge, coastal erosion, heavy rainfall). It also depends on distance to water, the building’s elevation and the cost to rebuild it⁠⁵. The rating manual lists the structural inputs. They include occupancy, construction type, foundation, first-floor height, machinery and equipment raised above the first floor, flood openings, floodproofing, replacement cost value, square footage and prior NFIP claims⁠⁴.

Flood zones still appear on the policy, but they no longer set the rate⁠⁵. The data shows it. In 2025, policies rated in a special flood hazard area (A and V zones) had a median of $2,302. Those in moderate- and low-risk zones (X, B and C) had a median of $1,968, so the gap was only about $330. The coastal V zones are the clear exception: their median was $3,680 and their mean $5,729 (our calculation from FEMA records)⁠¹.

State medians vary more than zone medians do.

Scroll the table sideways to see every column.

Florida has almost a quarter of all non-residential policies, yet its median is about the national figure. Among places with at least 500 policies, the highest medians were Hawaii, New Jersey, Connecticut ($3,572) and Massachusetts ($3,516). The lowest were Puerto Rico ($749), New Mexico and North Dakota ($1,193)⁠¹.

How an NFIP premium is built, with a worked example

The NFIP bill has four parts. The first is the premium for the building’s flood risk, less any statutory discount; FEMA calls this the discounted premium. The reserve fund assessment, which builds an NFIP reserve for catastrophe years, adds 18% of that discounted premium⁠⁴. The HFIAA surcharge is $250 for any non-residential building, compared with $25 for a primary residence⁠⁴⁠⁹. The federal policy fee is $47 ⁠⁴. In the 2025 records, 236,656 of the 236,664 non-residential policies carried exactly the $250 surcharge and the $47 fee (our calculation)⁠¹.

Worked example (our calculation, assumed inputs). Take a warehouse insured for $500,000 on the building and $150,000 on contents. Assume its discounted premium last year was $1,500 and that FEMA’s full-risk premium for it is $2,400.

1. This year’s premium

   Annual increases are capped at 18% for most properties. The cap does not apply when you raise coverage, lower the deductible or lose a Community Rating System discount⁠⁴⁠⁸. This example assumes the general 18% cap applies (some business property is subject to a 25% statutory increase, below). So the premium can rise to $1,500 × 1.18 = $1,770.

2. Reserve fund assessment

   18% × $1,770 = $318.60.

3. Fixed charges

   $250 + $47 = $297.

4. Total

   $1,770 + $318.60 + $297 = $2,385.60. Increases continue each year until the premium reaches the $2,400 full-risk level.

Two features of the pricing rules weigh more heavily on businesses than on homeowners:

• Business property can be on a faster glide path. Section 4015(e) requires the subsidized rates of the property types listed in 42 U.S.C. 4014(a)(2), which include “any business property”, to rise 25% a year until their average reaches the full-risk average⁠⁸⁠¹⁵. Older (pre-FIRM) business buildings also cannot get the pre-FIRM discount on a new NFIP policy, and those still carrying one from an earlier policy move to full-risk premium faster than pre-FIRM primary residences⁠⁴. FEMA’s records suggest many policies are still catching up. In 2025, 42.5% of non-residential policies were charged less than their full-risk premium, with a median of 74% of full risk among those (our calculation from FEMA records)⁠¹.
• The fixed charges apply per building. A policy covers one building⁠³. A business with three insured buildings pays 3 × $297 = $891 in surcharge and fee before any risk premium (our calculation). For a small contents-only policy, the fixed charges can be a large share of the bill.

Raising the deductible lowers the risk premium. Standard non-residential deductibles range from $1,000 (or $1,250 when building coverage is over $100,000) up to $50,000 each for building and contents⁠⁴. A lender may cap the deductible you can choose⁠³. The Community Rating System discount, worth 5% to 45%, depends on what your community does, not on your building. Since Risk Rating 2.0 it applies to every policy in a participating community, inside or outside the high-risk zone⁠⁵.

What the NFIP commercial policy pays for, and what it leaves out

Businesses are insured on the NFIP’s General Property Form. The same form covers apartment buildings of five or more units and condominiums with more than 25% non-residential occupancy⁠³. It insures against flood only. Flood here means general inundation of two or more acres, or of two or more properties, from overflow of inland or tidal waters, rapid runoff of surface water, mudflow or collapse of land along a shoreline⁠³.

• Building, up to $500,000: the structure and foundation, wiring and plumbing, central air conditioning and furnaces, walk-in freezers, permanently installed paneling and cabinets, and sprinkler systems⁠³.
• Contents, up to $500,000, bought separately: furniture, machinery and equipment, and stock (merchandise, raw materials, in-process and finished goods). A tenant can apply up to 10% of contents coverage to improvements it made to the building. Valuables such as original artwork are limited to $2,500 in total⁠³.
• Increased Cost of Compliance: up to $30,000 to elevate, floodproof, demolish or move a substantially damaged building. The building claim plus the ICC claim cannot exceed $500,000⁠³.
• Not covered: business interruption and loss of use, cash and valuable papers, and property outside the building. Sewer backup is covered only when a flood caused it⁠³. Owners of non-residential condominium units cannot buy NFIP building coverage⁠⁴.

Claims are paid at actual cash value, meaning replacement cost minus depreciation, for both the building and its contents⁠³. Separate deductibles apply to each⁠³. If the building is worth more than $500,000, or if you would lose income while it is being repaired, you need private excess flood or flood business income cover (see also commercial property).

When a lender or a federal program makes you buy it

The legal requirement depends on the loan, not on the type of business. Federal law requires regulated lenders to apply it to any loan secured by a building in a special flood hazard area, in a community where NFIP coverage is available. They may not make, increase, extend or renew such a loan unless the building is insured for the term of the loan⁠⁶. The same applies to “any personal property securing such loan”, which matters when inventory or equipment is pledged as collateral⁠⁶. The required amount is the lesser of the outstanding principal balance and the maximum coverage available for that type of property⁠⁶. For a commercial building, that maximum is $500,000 under the NFIP⁠³. Take a $1.2 million loan secured by one building: the legal minimum is $500,000 of building coverage. The statute sets a floor (“at least equal to”), so the loan agreement can require more⁠⁶.

What the law says about commercial loans:

• Private policies count. Lenders must accept private flood insurance that meets the statutory definition⁠⁶.
• Few exemptions apply to businesses. Small loans of $5,000 or less with a term of one year or less are exempt. So is state-owned property covered by an approved self-insurance plan. The exemption for detached structures applies only to residential property⁠⁶.
• No escrow requirement. The rule that flood premiums be escrowed covers residential property only⁠⁶.
• Force-placement. If coverage lapses or falls short, the lender must notify you. If you do not buy enough coverage within 45 days, the lender must buy it and may charge you the premiums and fees⁠⁶.
• Federal money. Federal agencies may not approve financial assistance to buy or build in a special flood hazard area unless the property is insured. The amount is the lesser of the project cost (less land) and the maximum coverage⁠⁶.

Waiting periods and NFIP lapses

A new NFIP policy, or an increase in coverage, takes effect 30 days after the application is complete and the premium is paid⁠⁷. There are three exceptions. Coverage bought in connection with making, increasing, extending or renewing a loan takes effect at closing⁠⁷⁠⁴. A building newly mapped into a high-risk zone gets a 1-day wait during the first 13 months after the map change⁠⁴. Some properties flooded from federal land after a wildfire also get a 1-day wait⁠⁴. A policy also will not pay for a flood that was already in progress when the waiting period began⁠⁴.

The NFIP can only sell and renew policies while Congress has authorized it. It lapsed from October 1 to November 12, 2025, and again from February 1 to 3, 2026⁠¹¹. On September 2, 2026, its authorization was extended to December 11, 2026⁠¹⁰. FEMA states that during a lapse it would still have authority to pay valid claims with available funds, but would stop selling and renewing policies⁠¹⁰. A business that has to renew or close a loan around a deadline may need a private policy if the program lapses again.

The private flood market

Private insurers sell flood cover both as standalone policies and as endorsements to property policies, and the NAIC’s figures include both. For 2025, the NAIC counted $1.24 billion in private flood direct written premium and 683,000 policies in force, commercial and residential combined⁠¹². The NAIC notes that one company appears to have misreported its policy count, so the real number of policies is likely about 100,000 higher⁠¹². The NAIC’s annual market share report shows the same scale. Private flood premium was $1.24 billion in the states and territories in 2025, with a direct loss ratio of 17.75%⁠¹³.

The NAIC does not publish a commercial total. Its slides say the 15 largest residential writers took in $430 million, over 87% of residential private flood premium⁠¹². Residential private flood premium was therefore under about $494 million, and most of the $1.24 billion was commercial (our inference from the NAIC figures). For comparison, the NAIC’s separate “federal flood” line, which insurers report for NFIP business, was $3.61 billion in 2025⁠¹³.

Brokers reported flood pricing as roughly flat in mid-2026. CIAB member brokers reported an average −0.3% change in flood premiums at renewal in Q2 2026⁠¹⁴. That figure is for brokered commercial accounts and does not measure NFIP rates.

Sources

1. 1
   FEMA, OpenFEMA, NFIP Redacted Policies - v3 (dataset and data dictionary; records as of Sept. 8, 2026) Checked 13 Oct 2026 · Back to text ↑
2. 2
   FEMA, OpenFEMA, FIMA NFIP Redacted Policies - v2 (deprecation date Oct. 15, 2026, per the OpenFEMA data set catalog) Checked 13 Oct 2026 · Back to text ↑
3. 3
   FEMA, National Flood Insurance Program summary of coverage: commercial property (F-778, January 2024) Checked 13 Oct 2026 · Back to text ↑
4. 4
   FEMA, NFIP Flood Insurance Manual, effective October 1, 2025 Checked 13 Oct 2026 · Back to text ↑
5. 5
   FEMA, NFIP's pricing approach (Risk Rating 2.0) Checked 13 Oct 2026 · Back to text ↑
6. 6
   Legal Information Institute, Cornell Law School, 42 U.S.C. 4012a, Flood insurance purchase and compliance requirements and escrow accounts Checked 13 Oct 2026 · Back to text ↑
7. 7
   Legal Information Institute, Cornell Law School, 42 U.S.C. 4013, Nature and limitation of insurance coverage Checked 13 Oct 2026 · Back to text ↑
8. 8
   Legal Information Institute, Cornell Law School, 42 U.S.C. 4015, Chargeable premium rates Checked 13 Oct 2026 · Back to text ↑
9. 9
   Legal Information Institute, Cornell Law School, 42 U.S.C. 4015a, Premium surcharge Checked 13 Oct 2026 · Back to text ↑
10. 10
    FEMA, Congressional reauthorization for the National Flood Insurance Program (updated Sept. 28, 2026) Checked 13 Oct 2026 · Back to text ↑
11. 11
    Congressional Research Service, What happens if the National Flood Insurance Program (NFIP) lapses? (IN10835) Checked 13 Oct 2026 · Back to text ↑
12. 12
    National Association of Insurance Commissioners (NAIC), Private flood insurance data, Severe Peril (EX) Working Group (May 14, 2026) Checked 13 Oct 2026 · Back to text ↑
13. 13
    National Association of Insurance Commissioners (NAIC), 2025 Market Share Reports for Property/Casualty Groups and Companies Checked 13 Oct 2026 · Back to text ↑
14. 14
    The Council of Insurance Agents & Brokers (CIAB), Commercial Property/Casualty Market Index, Q2 2026 Checked 13 Oct 2026 · Back to text ↑
15. 15
    Legal Information Institute, Cornell Law School, 42 U.S.C. 4014, Estimates of premium rates Checked 13 Oct 2026 · Back to text ↑

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