Americans Underprepared for Floods,
Underestimating Their Exposure
This spring’s flood season is forecasted to be worse than average, affecting some 128 million Americans. According to a recent survey we conducted with The Harris Poll, much of that damage is likely to be uninsured.
Why? Because most Americans vastly underestimate their exposure to flood damage.
Here’s a closer look at the disconnect, plus tips on how agents can tap into NFS resources to help Americans be ready when floods hit.
While 62 percent of respondents consider themselves “prepared” for flood damage, 49 percent said they’d have “no idea” what they’d do if they experienced a flood.
The takeaway: people may consider themselves “prepared” because they don’t actually think they’ll ever experience flood damage.
Respondents’ insurance rates back this theory up: just 12 percent have flood insurance, and 74 percent believe that they don’t need it.
That’s a dangerous misconception: flooding is the most common natural disaster, it’s getting worse, and it impacts everyone. It’s particularly dangerous this year, when spring forecasts predict floods affecting 40 percent of the population, followed by an above-average hurricane season.
Agents play a critical role in educating homeowners about floods, and homeowners appreciate it: 75 percent want the benefit of talking with an agent before buying flood insurance. Those conversations should include a few key talking points:
- 41 million people live in higher-risk flood zones – far more than the 13 million estimated by older FEMA models.
- Flooding is possible anywhere it can rain.
- The average cost to repair flood damage is $40,000.
- Flood risk is not fixed. Climate change, urban development, and failing infrastructure are making floods more common around the country.
- Flood insurance policies for those in moderate- and low-risk areas are generally affordable and can prevent serious economic damage in the event of a flood.
These conversations are more important than ever now, given the economic shocks caused by COVID-19. Before the pandemic, 74 percent of Americans were living paycheck to paycheck. With unemployment at historic highs, that number is likely even higher now, meaning even fewer people are financially able to recover from flood damage without insurance.
Outdated perceptions about flood risks paired with low awareness about the cost of flood damage make for a potentially devastating combination – especially when unemployment is high.
Luckily, agents can still prevent the worst fallout by taking these steps:
It’s not too late for agents to help customers prevent the worst effects of flood damage. With support from NFS’ digital educational library and sales toolkit, agents can make life better for every customer they serve.