Low interest rates can be a great thing for people purchasing homes or refinancing homes. However long term low interest rates can be bad for company profits. They can also have a big impact on flood insurance premiums. 

Impacts of low interest rates

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As mentioned before low interest rates can be great for people purchasing homes or refinancing homes. However long term low interest rates can have a big impact on the bottom line for insurance companies. Most companies that take money for services are looking for ways to invest these dollars to help their bottom line and growth. When interest rates are high these companies can make a lot of profit for the company. This is big for flood insurance companies because it allows them to keep rates stable. 

However when rates stay long term combined with alot of claim payout it can create a very unstable market. What happens is they are not making the money on their investments the way they need to and they are paying out a lot of $$$ for claims. As a result this has a big impact on the profits for not just private flood insurance companies but really any insurance company. As a result they have to find other ways of generating revenues and making sure they can pay these claims out.

Will Flood Insurance Rates Change

So many times the only other area for them to generate these $$$ is by increasing flood insurance premiums. 2019 is creating one of these possible situations with interest rates going down and flood insurance claim payouts being very high. So when your flood insurance comes up for renewal this is something you will want to pay attention to, especially if you live in areas that have been hit by flooding.

Some of the areas that could see the hardest hit from this might be Nebraska City, Nebraska, Tulsa Oklahoma, areas around Lake Keystone, and Fort Smith Arkansas.


If you have questions about how this might be impacting you please visit our website Flood Insurance Guru for more information.  You can also check out our YouTube channel or Facebook page where we do daily flood education videos.

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Chris Greene


Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation


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