Survey shows flood insurance is relatively unpopular
A new survey from Consumer Reports highlights the lack of flood insurance coverage among many U.S. homeowners. Floods are one of the most common and financially disastrous catastrophes in the country, but many people opt not to cover their homes and other properties because of the concept that they are immune to such disasters. The survey found that one out of three homes damaged by floods during 2012’s Hurricane Sandy were not protected by flood insurance coverage of any kind.
Conventional homeowners insurance policies do not protect against floods
Typical homeowners insurance policies in the U.S. do not protect consumers against flood damage. This is partly due to the fact that many properties are located in areas that are quite prone to flooding. States like Florida also boast of a high exposure to hurricanes and represent a major financial risk for insurance companies. Flood insurance has primarily become a matter for the federal government and the majority of homeowners in the country receive their coverage through the National Flood Insurance Program.
Survey outlines reasons why consumers avoid flood coverage
The survey from Consumer Reports shows that many homeowners do not purchase flood insurance protection simply because they believe their homeowners policies account for the damage caused by flooding. Other homeowners are discouraged to purchase this coverage because of its increasing costs. Many homeowners that do not live in areas close to water do not consider flood insurance to be worthwhile, but heavy rains often trigger floods that cause significant damage to properties, thereby highlighting the importance of coverage. Approximately 1 in 5 flood claims come from homes that are in areas that are not considered to be at high risk of flooding.
Government site helps consumers understand flood insurance coverage
Storms like Hurricane Sandy have shown that floods can be a particularly destructive force. Flooding was the most costly aspect of Hurricane Sandy and much of the damage caused by the storm’s heavy rainfall can still be seen even several months after its impact. In the U.S., flood insurance is currently undergoing several changes that could affect the overall cost of coverage, but homeowners can find information concerning the coverage available to them through Floodsmart.gov, the official website of the National Flood Insurance Program.