Why Don't Property Owners Have Flood Insurance? Part 1 of 5

Super storm Sandy was the largest Atlantic hurricane on record, spanning 1,100 miles, affecting 24 States from Florida to Maine and as far west as Michigan. In New Jersey and New York, the storm sure reached 14 feet above average low tide, crippling the financial center of the world. In Sandy's wake 285 dead and $70 Billion in damage. From an insurance perspective, less that 50% of those affected were insured. [Aon Benfield 2013/NOAA]

Less than one year later, torrential rains resulted in flash flood in Boulder, Colorado causing $2 Billion in damage with less than 2% of losses were insured [FEMA] In 2015, Texas and Oklahoma experienced catastrophic flooding with projected losses exceeding $3 Billion, with only 1/3 insured [Aon 2015]

Here some additional statistics for consideration:

• Due to Climate change and increased costal urbanization, flood damage is expected to double every decade for the rest of the century. [National Academy of Sciences]
• Of the 10 Million properties in the U.S. at higher risk of flooding, slightly more than 1/2 are insured through the National Flood Insurance Program.
• There is a 26% chance that these at risk properties will experience a flood loss during their 30-year mortgage, with an average cost of more than $35,000.
• There is a 1% chance of a home burning in the same 30-year term, costing an average of $18,000, and yet only 5% of Americans will go without Homeowners Insurance. [NFIP]

With evidence of increased flood risk, why are less than 7% of homes and 1/2 of high-risk properties insured against flood? This is 1 of 5 parts of Flood Insurance.

Please leave us your thoughts
Bobby Bates
Sterling Peaks Insurance, LLC
529 25 1/2 Rd Suite B111
Grand Junction, CO 81505
970-314-9188