Low Flood Insurance Penetration

The number of homeowners with flood insurance policies in the United States has dropped by at least one-third since 2011.
November 4, 2019

Even as intense storms and historic flooding since last year have caused significant damage, an analysis finds that the number of homeowners with flood insurance policies in the United States has dropped by at least one-third since 2011. In fact, only 15 percent of homes in the floodplains have adequate coverage in Nebraska, Illinois, and Missouri.

Floods can happen anywhere, not just on the coast, which is problematic for homeowners who do not have coverage. Keith Wolfe, president of U.S. property and casualty at Swiss Re, says the industry also needs to adjust its vocabulary and ensure that agents and customers understand the variety of flood coverage options available beyond the National Flood Insurance Program (NFIP). Raghuveer Vinukollu, senior vice president and natural catastrophe solutions lead at Munich Re America, adds that risk models are evolving, which means flood maps are starting to more accurately reflect the varying degrees of flood risk that communities face, outside of the 100-year or 500-year flood zone designations.

The reality today is that everybody has some flood risk, even if current FEMA flood maps show otherwise, and retail agents alongside private flood insurers are trying to spread that message to their clients.


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