When it comes to flood insurance deductibles, there are some general minimums and maximums are that are allowed but that range is quite large. For example, the deductible for a pre-FIRM (Flood Insurance Rate Map) residential property could be as low as $1,500 or as high as $10,000. Financial institutions have some flexibility determining what deductible they will allow a borrower to have but Flood FAQ #9 points out that …it may not be a sound business practice for a lender, as a matter of policy, to always allow the borrower to use the maximum deductible. A lender should determine the reasonableness of the deductible on a case-by-case basis, taking into account the risk that such a deductible would pose to the borrower and lender. Additionally, …a lender may not allow the borrower to use a deductible amount equal to the insurable value of the property to avoid the mandatory purchase requirement for flood insurance.
We have seen some misconceptions about flood insurance deductibles over the years, and Jerod explains more in the video.
Published 2026/06/29
