An active hurricane season is underway — here’s how and why to be prepared this year

Posted: 3 June 2020 5:50 pm

For every 5 people who are ‘prepared’ for a flooding event, only 1 is insured.

When major flooding happens, it causes unbelievable destruction. Consider that more than half of all flood claims across the nation come from hurricane storm surges or the heavy rainfall that comes with them.

If you’re like many, you may have written off the risk as insignificant and think you’ll be fine. And that means you could be in trouble. Here’s why.

  1. Greater reach than you’d think: Hurricane-related flooding can reach more than 100 miles inland, and FEMA stats show that about a third of all flood claims come from outside flood zones. So just because you’re not in a flood zone doesn’t mean you’re not at risk.
  2. Higher cost than you might imagine: Over the last decade, the average flood claim has ranged from a low of about $25,000 in 2009 to a high of more than $90,000 in 2017. With the average cost of flood insurance at $43 per month, even one claim in your lifetime would cost 10 times more than a life’s worth of flood insurance premiums.
  3. Homeowners insurance doesn’t cover flooding: The typical homeowners insurance policy does not cover damage from flooding, meaning the cleanup would have to come out of your own pocket. In fact, “flood is three times more likely than fire to impact a home over the course of a 30-year mortgage, yet homeowners are over six times more likely to be protected from fire than flood,” said National Flood Services CEO Ralph Blust.
  4. Once a hurricane forms, it’s too late to insure: Most flood insurance policies have a 30-day waiting period before your coverage becomes effective, so if you’re in the path of a hurricane, it’ll likely hit before you’re protected.

Flood insurance is becoming more accessible

More ways to get insurance: Since July 1, 2019, a new federal rule requires regulated lending institutions to accept private flood insurance policies comparable to the National Flood Insurance Program (NFIP), so you now have more options to get insured. As a result, the number of private insurers who offer flood insurance is surging. Check with your homeowners insurance agent or compare flood insurance companies to find one for you.

More time to renew: Due to the coronavirus pandemic, existing NFIP policyholders have 120 days to renew any policies that have expired or will expire by June 15. The normal grace period for policy renewals is 30 days.

An active hurricane season is underway

This year’s hurricane season kicked off this week and will run through November. Already tropical storms are making the news, and the National Weather Service has forecast an above-average season of storms, meaning the US may get hit by six to 10 hurricanes, with three to six of them classified as major hurricanes.

Despite the looming threat of severe weather — and despite a majority of Americans (62%) saying they’re “prepared for a flood,” only 12% actually have flood insurance, according to a Harris poll conducted by National Flood Services. “The findings underscore Americans’ lack of awareness of flood risks, despite the fact that flooding is the most common and costly natural disaster in the US. Further, the survey found 50% of homeowners say they’re ‘less interested’ in buying flood insurance due to financial stresses from the ongoing COVID-19 pandemic.”

On top of this year’s forecast, a group of lawmakers has warned mortgage giants Fannie Mae and Freddie Mac to prepare for a new norm of severe weather thanks to climate change, which is “increasing the frequency and severity of extreme weather events across the country.”

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