Flood insurance policy ownership plummets in California

flood insurance policies

Due to the ongoing droughts, Californians just don’t see the reason to pay for this coverage.

As both state and local officials have now been saying that the droughts that California has been facing may, in fact, be a “new normal” for the state, flood insurance ownership has fallen by 12 percent.

An estimated 30,000 insurance policies have been cancelled as they are no longer viewed as worth the price.

The decrease by 12 percent has happened from 2012 until now. The reason is that the reduction in rainfall and Sierra snowpack and the increase in temperatures are being seen as something that will continue on into the future. Therefore, Californians don’t see the risk of flooding as being worth the cost of the flood insurance that they have been carrying. Across the state, this trend has been continuing, as consumers attempt to reduce their use of water. Since that is a considerable focus in their lives, it is no mystery as to why they don’t feel that protection from flooding is something that is worth their monthly premiums.

That said, this trend toward flood insurance cancellation is troubling to government officials.

flood insurance policiesThe reduction of 30,000 policies since 2012 was recorded by the National Flood Insurance Program. Previously, Sacramento had been seen as one of the cities at the greatest risk of facing devastating floods and has historically had the most active insurance policies in the state. However, even in that part of California, the last three years have brought 6,000 policy cancellations.

According to California Department of Water Resources supervising engineer in the flood management division, Ricardo Pineda, “We’ve been in drought. People feel that their property is not at the same level of risk as during a non-drought year.”

Californians are being reminded that there are some areas in which flood insurance is mandated because the risk of devastation from flooding has not gone away with the droughts. They are also being prompted to review their homeowners insurance policies, as the standard coverage does not include flooding among the covered perils. It has also been pointed out that, despite the drought, this could be a major year for flooding as forecasts show that the El Niño weather pattern may bring heavy rains with it. As dry earth is less absorbent in sudden heavy downfalls, it could cause flooding to be even more devastating than in years with more regular rainfall.

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