You always hear about FEMA doing this and FEMA doing that. The federal government just wants more money from me, but what many people don't realize is the role that state governments can play in flood insurance options.

In this episode of The Flood Insurance Guru podcast we discuss the states play in flood insurance options.


Let's take a look at participating and non participating communities.


These are communities that are either part of the National Flood Insurance Program or are not. In order to be part of the National Flood Insurance Program strict floodplain management guidelines have to be followed.

Many times some smaller communities just don't have the resources or the funding to be a part of this program. This is the first way that states come into play. By not providing the additional funding states can put smaller communities at risk for not having flood insurance, getting disaster grants, or assistance.

One state that has the most non participating communities is Texas. This is also the state that has suffered some of the most flood losses since 2017. It's important that states make sure that residents know that private flood insurance options are available.

This is the area where states can play the most crucial role when it comes to flood insurance options. If you have read our recent blogs, watched our videos, or even listed to other podcasts then you know there are two paths when it comes to flood insurance.

Private flood insurance breaks down into two categories

  1. Admitted
  2. Non Admitted


The major difference between these are state guidelines. Non admitted companies are not licensed in the state, while admitted companies are. While they are not licensed they are still allowed to do business. Part of working with a non admitted carrier is additional fees are applied on a policy you may not regularly have to pay with an admitted.

Now its important to understand that each state has different guidelines on how these fees can be charged. As a result some surplus companies choose not to operate in certain states because it just isn't profitable.

A great example of this is the state of Kentucky. Kentucky is one of few states that charges taxes on insurance.

Kentucky taxes on flood insurance

You can imagine as a consumer being taxed on insurance pretty crazy right? Well Kentucky takes it to a new level not only do you have a state tax, but in many situations you have a county tax, and a municipality tax.

As you can imagine having all these taxes can make doing business pretty difficult. As a result Kentucky has fewer private flood insurance options available than any other state.

Thats right even more than states like Louisiana, Texas, and Florida where flooding is a constant issue.

So what can be done?

Well working with your local congressmen to make it easier to do business in the state is a first step. Until some kind of action is taken private flood insurance options will continue to be limited in the state leaving property owners with few flood insurance options.

So maybe you live in Kentucky and have questions about your flood insurance options or want a better understanding of your flood zone? Then make sure to visit our website. You can also check out our daily flood education videos on our YouTube channel.


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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