Category Archives: Flood Insurance

Hundreds of homes and businesses were damaged by flooding, as heavy rains inundated Jackson, Mississippi over the Presidents Day weekend, pushing the Pearl River to its third-highest crest ever.

“If these heavier rainfall events increase in frequency, our rivers and streams are going to be responding in line too,” said Suzanne Van Cooten, hydrologist in charge of the National Weather Service’s Lower Mississippi River Forecast Center to the Wall Street Journal.

Federal data show last year was the second wettest on record across the continental U.S., and Mississippi’s river communities are keeping an eye on forecasts after an unusually early start to the 2020 spring flood season following a soggy 2019.

Yet flood insurance take-up rates remain low. “The alarming truth is that entirely too many Americans could protect themselves with flood insurance, but simply don’t know the extreme risk of devastation they are facing, or even worse, they are deciding to take their chances and ignore it, said Sean Kevelighan, Triple-I CEO. “Triple-I’s recent analysis of National Flood Insurance Program’s (NFIP) data which is now illustrated in an interactive map of Mississippi counties along the Pearl River show some counties’ flood insurance take-up rates are as low as .01 percent. In other words, as much as 99.9 percent of people living in an active flood prone area are without any protection or recovery method. The intent of sharing this information is to encourage Americans to take more action to protect themselves by identifying the right insurance coverage, coupled with taking recommended precautionary measures, all of which are proven to dramatically boost their ability to recover from disaster.”

“Unacceptably low”

Flooding is the most common and costly natural disaster in the U.S., causing billions in economic losses each year. According to the National Flood Insurance Program (NFIP), 90 percent of natural disasters in the U.S. involve flooding. Flood damage is excluded under standard homeowners and renters insurance policies, but, flood coverage is available as a separate policy from the NFIP and from some private insurers.

Flood insurance was long considered an untouchable risk by private insurers because they didn’t have a reliable way to measure the risk. In recent years, however, modeling firms are getting better at assessing flood risk, and insurers have become more comfortable underwriting it.

Triple-I’s 2018 Pulse survey found 15 percent of U.S. homeowners had flood insurance, up from 12 percent who had the coverage in 2016. A McKinsey & Co. analysis found that as many as 80 percent of Texas, 60 percent of Florida, and 99 percent of Puerto Rico homeowners lacked flood insurance. Munich Re has called flood insurance take-up rates “unacceptably low.”

Reasons often cited for lack of coverage is that it is too expensive, that homeowners are not aware they don’t have it, and that people underestimate the risk of flooding.

At Triple-I’s 2020 Joint Industry Forum, FEMA Deputy Administrator for Resilience Dan Kaniewski and Weather Channel Hurricane expert Dr. Rick Knabb, talked emphatically about the need for flood insurance – even where banks don’t require it to provide mortgages.

“When we at FEMA talk about ‘resilience,’” Kaniewski said, “we mean preparedness. We mean mitigation. We mean insurance. Insurance is the best resilience tool.”

Knabb agreed, calling upon meteorologists around the world to “talk about insurance more.” He also called on insurance agents to discuss flood coverage for their customers who aren’t in flood zones.

“If it can rain where you live,” he said, “it can flood where you live.”

Disaster Preparedness, Disaster Resilience, Flood Insurance

Triple-I’s insurance for resilience project

February 5, 2020 Maria Sassian Leave a comment

In this video, Sean Kevelighan, CEO of the Insurance Information Institute (Triple-I), talks about the Triple-I’s Resilience Hub that the organization began developing in 2019 in partnership with Aon and the Colorado State University Department of Atmospheric Science.

The Hub’s goal is to use data in a way that helps people visualize and understand the risk of natural catastrophes with which they are living as catastrophes become more severe and more people move into high-risk areas.

“We’re tracking hurricane paths all the way back to 1990 so that when we forecast with those relative years, people can better understand what the impact might be in today’s economy,” said Kevelighan.

The project also tracks public flood insurance take-up rates through the National Flood Insurance Program. The average take-up rate for flood insurance is only 12 percent for the nation.

The Hub is part of the Triple-I’s overall insurance for resilience project, which aims to build a coalition that includes government agencies such as FEMA, private sector stakeholders such as Aon, and academic institutions such as the Wharton Risk Center to maximize impact. The Hub’s goal is to provide in one location easy-to-use content to empower consumers to make data-driven decisions when it comes to managing their exposure to extreme weather events. “What we want to drive in the long run is behavioral change. We want people to think twice about where they are living and how they’re living so that they can be more resilient.”

Business Risk, Flood Insurance, Terrorism Risk

House approves TRIA, NFIP extensions as part of $1.4 trillion spending package

December 18, 2019 Maria Sassian Leave a comment

On Tuesday, December 17, the House approved a package of bills that includes a seven-year reauthorization of the Terrorism Risk Insurance Act (TRIA) and funding for the National Flood Insurance Program until September 30, 2020.

Numerous insurance industry groups applauded the extension of TRIA. The act has been an important support in the effort to supply terrorism insurance through the private market. Since it was enacted, the percentage of companies purchasing terrorism insurance has risen to 80 percent, and the price of coverage has fallen more than 80 percent.

The $1.4 trillion spending package also includes:

Federal funding ($25 million) for gun violence research for the first time in 20 years.
A repeal of Obamacare taxes, including a 2.3 percent excise tax on medical devices, a health insurance industry fee that would have taken effect in 2020, and the 40 percent “Cadillac” excise tax on the most expensive health-insurance plans.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which features provisions that make it easier for smaller employers to join open multiple-employer plans, ease non-discrimination rules for frozen defined benefit plans, and add a safe harbor for selecting lifetime income providers in defined contribution plans.

The bill is expected to pass the Senate and be signed by President Trump before government funding expires on December 20.

Flood Insurance

FEMA publishes flood insurance claim records going back to 1978

June 14, 2019 Maria Sassian 2 Comments

“New York City, USA – October 31, 2012: In the aftermath of Hurricane Sandy the Battery Park Underpass is seen completely flooded along the West Street entrance looking north in Lower Manhattan.”

On June 11 the Federal Emergency Management Agency (FEMA) published data covering more than 2 million flood insurance claim records going back to 1978 on its OpenFEMA website. This is a giant leap toward helping scientists, policy-makers, and the public understand how the National Flood Insurance Program (NFIP) works, where flood damage occurs, and what the costs are to the nation.

“This data demonstrates FEMA’s commitment to build a culture of preparedness by providing insights to our stakeholders that can help close the nation’s insurance gap,” said Dr. Daniel Kaniewski, FEMA’s Deputy Administrator for Resilience, in a news release. That gap is quite sizable: FEMA estimates that only 3 percent of homeowners have flood insurance.

Private insurers, who have been carefully getting back into covering flooding in recent years should be able to use the data to grow in the flood insurance space. “The private market will now be able to identify areas with prior flood claims and historical flood insurance policies,” said David Maurstad, FEMA’s Deputy Associate Administrator for Insurance and Mitigation.

As useful as these data could be, the dataset does not include the exact addresses of affected buildings, to protect policyholders’ privacy. It does include ZIP code-level data on where policyholders received payments. A home buyer might not be able to learn the full history of flood risk for a property, as this South Carolina Post and Courier article points out.

However, the published data do enable analysis of how coverage has changed in a geographic area, and where NFIP claims have been filed for more than 40 years. Information such as: state, census tract, ZIP code, year of loss, and amount paid on claims are included. The dataset will be updated every 45 to 60 days and delivers the most specific amount of geographic data possible.

The Natural Resources Defense Council (NRDC) has already used the data to create this animation showing the location of every NFIP claim in the contiguous United States, from 1970 through 2018.

The I.I.I. has more insights about flood insurance here.

Disaster Preparedness, Flood Insurance

I.I.I. and the Weather Channel get the word out about flood insurance

March 19, 2019 Maria Sassian Leave a comment

How to Get Flood Insurance

Only 12 percent of Americans have flood insurance but many more will need it in a severe weather event. Learn more at iii.org about how they are helping homeowners and renters to obtain it.

Posted by The Weather Channel on Thursday, March 7, 2019

To make sure that homeowners are aware of the importance of flood insurance, the I.I.I. recently partnered with the Weather Channel.

A video posted to the Weather Channel’s Facebook page demonstrates just how destructive flooding can be; for example, in the video you can see the devastation from Hurricane Sandy wreaked on Breezy Point, a coastal community in Queens NY.

“What’s remarkable about flood insurance is that only 12 percent of people have it,” says Sean Kevelighan, I.I.I.’s CEO. One misconception that people have about flood insurance is that it’s included in a homeowners policy. But that’s not the case. A separate flood policy must be obtained. Flood insurance is mostly sold by FEMA’s National Flood Insurance Program, but some private insurers have begun offering it as well.

For those savvy enough to have purchased the coverage, it made a world of difference. “If we did not have flood insurance we would have been completely dependent on [government assistance]. It would never have been enough to fix out house”, says one resident of Breezy Point.

The video has garnered over a thousand views so far. We hope it leads to more people getting this invaluable protection. For more information about flood insurance click here.

Flood Insurance

You need flood insurance: “ice jam” edition

February 4, 2019 Lucian McMahon Leave a comment

So you live in Wisconsin, far away from any hurricanes and ocean storm surges. You don’t need flood insurance, right?

Wrong. The big thaw spreading across the Midwest is a perfect lesson for why you do, in fact, need flood insurance.

The Wall Street Journal reported that in Lone Rock, Wisconsin, temperatures rose 80 degrees in three days, from minus 39 to 41. That kind of temperature swing is a recipe for floods.

Most obviously, melting ice and snow can swell rivers. But especially worrisome are “ice jams,” which form when frozen rivers melt into large ice chunks that can lodge together and block the river’s flow. In the worst cases, these artificial dams cause serious flooding in the area around the river.

This happened last year in Vermont and upstate New York when a rapid thaw followed a deep freeze. In Swanton, Vermont an ice jam on the Missisquoi river flooded a state highway for over a mile and inundated several homes, forcing many to evacuate.

Here’s the bad news: standard homeowners insurance policies don’t cover flood damage. If you don’t have flood insurance for your home, you probably aren’t covered under your homeowners or renters policies because flood risks used to be considered uninsurable.

To address this lack of coverage, the National Flood Insurance Program (NFIP) was created back in the 1960s. The NFIP is a federal program that provides flood insurance to participating communities. If your community participates in the program, you can often purchase insurance through a private insurer that handles policies and claims on behalf of the NFIP.

Private insurers have also recently begun offering flood insurance outside of the NFIP, as new modeling techniques have helped them get a better handle on the risks and costs.

Flood insurance will usually cover physical losses to your home caused by floods or flood-related events, like erosion – with some limitations (trees and fences aren’t covered, for example). You can also buy coverage for the contents inside your home, making flood insurance a crucial tool to help you get back on your feet.

Make sure to talk to your insurance agent about the right flood policy for you. Yes, even you Wisconsinites out there.

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