Flood Insurance Is for Everyone

Most homeowners don’t have flood insurance. Part of that problem is misconception: many homeowners don’t realize their home insurance policy excludes flood coverage. For others, they aren’t required by federally regulated lenders to carry it, so they don’t.

But the reason most people don’t have flood insurance? They drastically underestimate their own risk of flooding – to their detriment.

So let us be the first to say it.

Everyone needs flood insurance. And this is why.

A Standard Home Insurance Policy Isn’t Enough

A basic home insurance policy can cover some types of water damage, but it doesn’t cover flood damage caused by storm surges. Flood coverage must be added or purchased as a separate policy. Unfortunately, a third of homeowners recently surveyed think homeowners insurance covers flood damage.

And that misconception has consequences. According to the 2018 Insurance Information Institute Pulse survey, 75 percent of American homeowners don’t have flood insurance.

More disconcerting is that the coastal homeowners who arguably need flood protection the most also lack protection. According to McKinsey & Company, about 60 percent of Florida homeowners don’t have flood insurance despite having front-row seats to Category 4 hurricanes that recently made landfall in the US.

Floods Can Happen Anywhere – Yes, Anywhere

As FEMA famously noted, “Anywhere it can rain, it can flood.” That’s because it’s not proximity to the coastline or bodies of water alone that determine whether your area can flood. Depending on how your city or county manages waterways (think: dams, levees, and reservoirs) and the changes made to the land, your region may be one prolonged rain, storm surge, or sudden snowmelt away from flooding. If infrastructure isn’t well-maintained, urban flooding can be a big risk.

Florida in particular is more at risk for floods than any other state, in part because it has 11,000 miles of rivers, streams, and waterways. But its flat terrain and urbanization (pavements and other impenetrable surfaces that impede natural drainage systems) further increase its flood risk. Plus, it experiences an average of 59.21 inches of rainfall per year.

Federal Flood Maps Are Inaccurate

To be fair, FEMA has a lot on its plate. It has the near impossible task of keeping flood hazard maps up to date for more than 22,000 communities, and it is the first to admit what a challenge that is. Though FEMA is supposed to update its maps every five years, nearly two-thirds of flood maps haven’t been updated in that time. Some maps haven’t been updated in more than 40 years.

Many homeowners only purchase flood insurance if they live in a high-risk flood zone or Special Flood Hazard Areas (SFHAs), have a federally-backed mortgage, and are therefore required to have flood insurance. But if homeowners rely solely on these mandates or federal maps to inform whether or not they have flood insurance, they may put themselves at serious risk.

Take Hurricane Harvey for example. The hurricane damaged more than 204,000 Houston homes, most of which were outside the federally regulated 100-year floodplain. More than 80 percent of these homeowners didn’t have flood insurance.

Our Collective Flood Risk Is Growing

As our planet gets warmer and sea levels rise, flooding will only get worse. In fact, climate change contributes to four key factors that increase flood risk:

1. Heavier precipitation. A warmer atmosphere holds more water, and that means heavier rains. Experts expect the current trend of rising temperatures will increase precipitation up to three times the historical average through the end of the 21st century. As you might’ve guessed, heavier rainfall increases the likelihood of floods.
2. More snowmelt. Rising temperatures also lead to faster and earlier snowmelts, which can cause an uptick in spring flooding. Winter and spring soil is too frozen or wet to absorb the snow and rain runoff from rivers, which means higher flood risk.
3. Frequent hurricanes. Irma. Maria. Harvey. Florence. Michael. In just the past few years alone, we’ve witnessed the catastrophic might of hurricanes, and climate change will only increase their frequency. Climate scientists predict an 80 percent increase in the frequency of category 4 and 5 hurricanes over the next 80 years in the Atlantic basin. And stronger storms bring greater rains, stronger winds, and stronger storm surges.
4. Higher seas. Rising ocean temperatures, which melt glaciers and ice sheets, cause sea levels to rise around the world. Not to bring you down or anything, but our oceans have already risen seven to eight inches since 1900. The National Oceanic and Atmospheric Administration (NOAA) predicts the global sea level will rise at least 12 inches by 2100 on a low-emissions pathway and 8.2 feet if nothing changes. Higher seas increase high-tide flooding, which has already doubled in the last 30 years, and increases opportunities for storm surges.

Flooding Is Super Expensive

To cover flood losses from 2007 to 2017, the National Flood Insurance Program (NFIP) shelled out an average of $2.9 billion per year, whereas individual events, like Hurricane Harvey, racked up $8.9 billion on its own.

Let’s break that down even further. For individual homeowners, the national average flood claim payout was $52,000 in 2019, according to FEMA. For Florida homeowners specifically, the average flood claim payout in 2019 was $28,900.

Now imagine facing a $28,900 repair bill without insurance. For many families, that is an impossible sum of money. They would lose their home.

That’s the real reason flood insurance is for everyone. No one should be left without the means to rebuild their lives after a disaster.

The good news is the average flood insurance endorsement from Kin is a mere $190 a year – or an extra $15 a month. It’s a small price for a world of extra protection.