The Impact of Low Flood Insurance Retention

Despite intense storms and the Midwest’s historic flooding in the past year, the number of homeowners with flood insurance policies in the United States has significantly dropped over the last few years. Many homes in floodplains have inadequate coverage. This is very problematic, considering the flood risk that many homeowners face, whether they’re on a coastline or not.

When Disaster Hits Communities 

From a flooding perspective overall, whether you’re talking about the coast or whether you’re talking inland, flooding has been impacting communities both from a frequency and severity standpoint. A smaller number of big hurricanes doesn’t mean flood risk has gone away. Tropical storms have been and will continue to be extremely damaging as well.

Many communities are constantly seeing water outside their front doorstep and they have less insurance, creating high losses. Losses have still been very high because of the low insurance penetration. In fact, flood insurance penetration is sitting at 15 percent across the entire US. This is a serious issue for communities and for the country as a whole since it’s impacting people, property directly, and the economy directly.

Protection Where it Counts 

The reality today is that everybody has some flood risk, even if current FEMA flood maps show otherwise, and retail agents alongside private flood insurers are trying to spread that message to their clients. The federal product has limits and although it may be useful in certain circumstances, the private market can actually offer a much broader product that is more suitable for a larger part of the population at an affordable rate.

The smaller but more frequent flooding events have helped to raise some awareness about the need for flood insurance products. They clearly show where protection gap exists, and unfortunately surprised homeowners in a lot of cases, and even some small businesses, find out the hard way that they are not covered for this peril in the insurance products they’ve chosen to purchase. When it comes to water damage resulting from weather-related flooding, many homeowners have been confused with the jargon used in insurance solutions, so some agents have tied to solve part of that problem by shifting the vocabulary.

As the private flood market continues to make waves among homeowners and businesses, retail agents need to understand that there is a broad set of flood offerings that offer much more expansive coverage than what the federal government program allows. Risk models are also evolving, which means flood maps are becoming increasingly accurate reflections of the varying degrees of flood risk that communities face, outside of the 100-year or 500-year flood zone designations.

There is a lot more granularity of information that’s available, so that’s changing the market landscape, and helping insurance agents come up with different solutions. The best product that we can give homeowners is to provide them with a range of solutions and let them choose. In the past, that wasn’t an option, as it was just one solution, so that’s been a very positive change.

About AmSuisse

Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.