Why Better Flood Claim Management
Is Good News for Real Estate
The whole flood insurance industry has modernized in the past decade, and its digitization has made flooding easier to deal with for a growing number of well-prepared homeowners.
Thanks to remote adjusting and mock disaster training, the flood insurance claim process is streamlined and everyone benefits from this time savings.
In the big picture, this also means that although recovering from flood damage isn’t less of a hassle, homeowners who know about these process improvements are less daunted by the task of submitting a flood claim. And this means they’re more likely to understand the value of having appropriate flood insurance coverage before disaster strikes.
With more education, prospective homeowners might be more inclined to buy a property with some level of flood risk if they know that handling a flood claim is easy – and real estate agents can likewise make coverage part of the story they tell about taking care of these valuable assets.
Educated Buyers Are Happy Homeowners
As we’ve written before, many homebuyers don’t know who to ask about a property’s flood risk and who is obligated to share available information by law. Although 21 states still have no statutory or regulatory requirements around flood disclosure as of January 2021, this gap highlights a big area of opportunity.
Both real estate agents and insurance agents are well positioned to advocate that homebuyers purchase appropriate flood insurance coverage, even if they aren’t buying within a Special Flood Hazard Area (SFHA).
Homebuyers who go into their mortgage with a complete picture of their flood risk are better positioned to take flood mitigation measures, purchase appropriate flood insurance, and bounce back stronger, if their home does suffer flood damage down the line. Information is power, and the more homeowners know about their flood risk and what a flood claim process will look like, the less daunting this piece of the homeownership puzzle will be.
To learn more about how you can help educate homeowners, check out our agent resources.
Better Flood Insurance Coverage Helps Insulate Property Values
If you live in a Special Flood Hazard Area, you have at least a 1 in 4 chance of flooding during a 30-year mortgage and you’re likely required to carry flood insurance.
But say you don’t live in an SFHA. You’re just a savvy homeowner who is familiar with your property’s flood risk and appropriately insured with a flood policy. If your neighbors don’t know that they have an even higher flood risk and don’t have flood insurance, it’s in their best interest and yours that they get the right coverage for their home.
Why? In the event that a major flood hits your block, the damage to their house and other uninsured properties may drag down property values in your area if the homeowners are unable to recover financially and repair their homes.
Flood coverage on a neighborhood level can have a dramatic impact on property values after a disaster strikes, as many homeowners learned in the wake of Hurricane Sandy, when found themselves underinsured and locked in a months-long claims process. (It’s worth noting that since 2012, flood claims management technology like our Trident platform have improved dramatically.)
While it’s not a panacea, flood insurance is an important starting place to ensure that those who live in a flood zone are appropriately insured because isn’t just an individual concern. A couple of uninsured homes can impact the property values in an entire community. And the better your flood claims management system, the more quickly you can get everyone back on their feet.
Healthy Flood Risk Awareness Is Good for the Whole Community
We can all learn a lot from how our states respond to flooding, and this can help individual homeowners and communities assess what measures they can take to prepare for the next natural disaster.
Like flood risk, local disaster awareness varies greatly by location. From California’s wildfires to New England’s ice storms, each state’s residents have their own seasonal concerns and expectations for how they will respond based on experience.
But homeowners, small towns, and suburbs are limited financially by what measures they can take to mitigate the flood damage. As anyone who reads a major daily newspaper knows, flood risks are rising around the country and post-hurricane season recovery is getting more costly each year. To help preserve property values in the face of our changing climate, we need major action at the city and state levels to…
- Continue to educate homebuyers and homeowners who may not be aware that their flood risk has evolved.
- Educate insurance agents and real estate agents about the importance of discussing flood risk and flood insurance policies nationwide.
- Advocate for infrastructure to proactively prepare for where the water will go when the next flood happens.
To find out more about what you can do to raise flood awareness, contact National Flood Services today.
The Future of Flood Risk Management and Disclosure Is Digital
As the climate changes, property values will too. This isn’t something a lack of awareness will solve, but with a proactive approach to flood risk education, we can ensure that homeowners are prepared before a flood happens and to recover quicker after the fact.
Over time, better flood claim management will lead to less homeowner concern over the hassle of filing a flood claim and an increasingly robust understanding of what it’s like to live through a flood without being financially devastated by the damage. As the number of properties in flood zones increases, this relationship between flood insurers and property owners will become increasingly important.
To find out more about how National Flood Services can help you find the resources you need, contact us today.