Since Hurricane Season is in full swing, let’s discuss how we can better prepare ourselves this year after last year’s natural disasters. One simple way is to purchase a flood insurance policy. According to an article in The Economist, Hurricane Harvey caused an estimated $30 billion in property losses - with only about 40% of property having an active flood insurance policy in place. That means the remaining 60% of Texas homes and businesses impacted by the flooding Harvey created were uninsured. FEMA has reported 98% of counties in the United States have experienced a flooding event, yet flood insurance is still not widely carried.

So why is it that the average property owner doesn’t purchase flood insurance? One cause may be due to an overall lack of consumer understanding. We thought we would share some background and general information about the coverage to help our clients better prepare for the next time. Most property policies - including residential and business - do not cover flood damage. Not to mention, unless it is lender required, there is a 30 day waiting period from the date you request to bind Flood Insurance until the day the policy goes into effect. Did you know August 1st is the 50th Anniversary of the National Flood Insurance Program? The NFIP covers the vast majority of flood insurance policies currently in force. In 1979 FEMA was established and began overseeing the NFIP. FEMA determines the flood risk that a community has and uses historical data and surveys to create maps to identify and outline floodplains. These floodplains help to determine the area’s risk for flood, which impacts the cost of flood insurance premiums. It’s important to understand, that just because your property isn’t inside a high-risk floodplain doesn’t mean you don’t have any risk of flooding. Hurricane Harvey was the 3rd “500-year-flood” Houston experienced in 3 years.

Well then, you might be thinking, what is considered a flood? According to FEMA, a flood is “A general and temporary condition of partial or complete inundation of normally dry land areas from: (1) The overflow of inland or tidal waters; (2) The unusual and rapid accumulation or runoff of surface waters from any source; (3) Mudslides (i.e., mudflows) which are proximately caused by flooding and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current.” Basically, Flood Insurance covers damage done to your property due to rising water. This can be brought on by hurricanes, broken levees, newly developed land, outdated/clogged drainage systems, landslides/earthquakes, or other natural disasters. So even though you might have hurricane coverage on your home, and the rising water is caused due to torrential rains from a Hurricane (as was the case with Harvey), the water damage that was caused by the flooding most likely would not covered by the hurricane coverage on your property policy.

FEMA infographic

Click here to learn more about Flood Insurance. Please reach out to us to get your Flood quote started today. The average policy premium is about $700/year and the average claim is about $43,000. Don't be caught in the storm without protection!