Top 7 Reasons Your Insureds Need Flood Insurance

This post is part of a series sponsored by SWBC.

As the person responsible for securing your clients’ peace of mind by making sure their home and property are covered in an unfortunate scenario, you want to make sure your clients aren’t left out to dry when it comes to having adequate flood coverage.

In this blog post, we’ll provide helpful information you can share with your insureds, including what the meteorologists at the National Oceanic and Atmospheric Administration (NOAA) predict for the 2022 Atlantic hurricane season and the top seven reasons why flood insurance is a must-have for your clients.

The U.S. Is Experiencing Above-Average Hurricane Activity in 2022

According to an August 2022 report from NOAA, “Atmospheric and oceanic conditions still favor an above-normal 2022 Atlantic hurricane season. NOAA forecasters have slightly decreased the likelihood of an above-normal Atlantic hurricane season to 60% (lowered from the outlook issued in May, which predicted a 65% chance). The likelihood of near-normal activity has risen to 30% and the chances remain at 10% for a below-normal season.”

Top 7 Reasons Why Flood Insurance Is a Must-Have for Your Insureds

Here are the top 10 reasons your clients should consider obtaining flood insurance:

Reason #1: Flood damage is not covered by homeowners insurance

Flooding is the most common natural hazard in the United States. In addition to flooding from hurricanes, floods and flash floods occur in all 50 states. Despite this, damage from flooding is not covered by your clients’ homeowners insurance policies.

Reason #2: Over 20% of flood claims don’t originate in high-risk areas

Mother Nature is unpredictable, which means flood risk for properties in moderate- to low-risk areas is present for nearly all homeowners.

For example, when Hurricane Harvey hit Houston in 2017, it left over 200,000 damaged homes in its wake and caused $125 billion in total damages. Of the houses and businesses affected by the storm, 80% were located outside of the 100-year flood plain. The majority of these homeowners did not have flood insurance.

Reason #3: New land development could make your clients’ property more prone to flooding

Your clients should be aware of new land development or major construction near a home or property. These projects can create changes in natural runoff paths for water and could make their property more prone to flooding.

Reason #4: Just one inch of floodwater in your home can result in over $25,000 in property damage

According to FEMA, a mere inch of water from a flood can come with a big price tag—to the tune of $25,000 for the cost of repairs.

Reason #5: Federal aid can be more costly than your clients think

If your client’s property is impacted by a hurricane or other declared natural disaster, any federal disaster assistance distributed by FEMA is treated like a loan with interest that must be paid back to the government. With interest rates rising, this could be a costly option for your clients.

Reason #6: Your clients could receive reimbursement for damage prevention

Individuals with flood insurance may be eligible to receive up to $1,000 reimbursement for taking preventative measures to protect their homes from flooding. This could include things like storage space and pump rentals.

Reason #7: Standard policies typically provide coverage up to $250,000, but excess insurance is available

Most standard policies only provide coverage up to $250,000 for residences or up to $500,000 for commercial property. If the estimated cost to rebuild a property is higher, excess flood insurance can help cover these costs.

Conclusion

Ideally, your clients will never have to use their flood insurance policy—but it’s always best to ensure they have appropriate coverage in case the worst happens.

SWBC’s excess flood insurance coverage goes above and beyond the standard coverage limits offered by the NFIP. The program also covers funding for living expenses to help the insured through the transition process, which is something the NFIP does not offer.

In addition, SWBC is rapidly expanding coverage to help agents access new private flood insurance options for their clients so that they can offer direct alternatives to the NFIP.

Visit our website to learn more about our excess and private flood insurance options.

Topics Flood