Many Still Lack Flood Coverage As Hurricane Season Nears Its Peak

INSURANCE INFORMATION INSTITUTE
New York Press Office: (212) 346-5500; media@iii.org

NEW YORK, August 17, 2011 — Less than a fifth of U.S. homeowners have a flood insurance policy that protects their property and personal belongings, even though more than four out of every five natural disasters nationwide involve flooding, according to the Insurance Information Institute (I.I.I.).

 

Coverage for flood damage resulting from surface water, including storm surge caused by hurricanes, is excluded under standard homeowners and renters insurance policies; however flood coverage is available both from the National Flood Insurance Program (NFIP) and from a few private insurance companies.

 

The National Oceanic and Atmospheric Administration (NOAA) recently upgraded its Atlantic hurricane season forecast. NOAA said it envisioned 14-19 named storms between August 4, 2011, and November 30, 2011, up from the 12-18 named storms the federal agency projected in May 2011. NOAA also said the number of 2011 Atlantic hurricanes would likely be closer to 7-10 in number, rather than the 6-10 hurricanes the agency predicted would develop in May 2011.

 

During the first six months of 2011 alone, the federal government declared 28 major flood disasters. This put the U.S. well ahead of the pace set in 2010, when 50 federally declared major flood disasters occurred during the entire year.

 

“People tend to underestimate the risk of flooding,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “But, in fact, 90 percent of all natural disasters in this country involve flooding. It is important to note that there is a 30-day waiting period for flood insurance to go into effect, so don’t delay purchasing this important financial protection.”

 

While the risk of flood damage is real, a 2011 poll by the I.I.I. found that only 14 percent of American homeowners had a flood insurance policy. The percentage of homeowners with flood insurance was highest in the South, at 19 percent. Thirteen percent of Midwestern homeowners had a flood insurance policy in 2011, along with 12 percent of homeowners in the West and 5 percent in the Northeast.

 

Consumers can find out their risk of flood and the cost of a policy by going to the NFIP’s website: FloodSmart.gov.

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