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Louisiana Insurance Report

flood 101: what you need to know about flood insurance

Posted by Levi Kastner on Jun 30, 2020 1:53:02 PM



What YOU NEED to Know About Flood Insurance:  FLOOD 101


As property markets continues to harden in 2020, it is more important than ever to educate clients about the risk of flooding and ensure adequate coverage options are offered to protect the home, one of their largest assets.

Flooding is the most common and costly natural disaster in the United States, with 90% of natural disasters in the U.S. involving flooding.  Yet, most property owners do not think their building is susceptible to flood. Common opinions on flood insurance include, “I’m not in a flood zone..” “My realtor told me I am in a preferred flood area;” or the best, “It hasn’t flooded in this area in a few years.” Because mortgage mandatory purchase requirements exist ONLY for buildings deemed to be in high-risk flood zones, most property owners assume that if it is not required, then the threat does not exist. This could not be more incorrect. The highest-risk areas have at least a 1% annual chance of flooding. To compare, the average chance of a home fire is 0.33%...nearly three times less likely to occur in any given year.

Key facts about low-risk flood zones include:

  • More than 20% of claims come from properties located outside of the high-risk A and V flood zones.1
  • More than one-third of the federal disaster assistance for flooding is allocated to properties found outside the high-risk A and V flood zones.2
  • The NFIP is comprised of 50% of properties in low-risk flood zones and 50% of properties in high-risk flood zones, even though more than 90% of properties exist in low-risk flood zones.4
  • Where not required to carry flood insurance, 43% of property owners believe their property (homeowners) policies cover flood.5

After years of program deficits, Congress passed the Biggert-Waters Act of 2012 to encourage private insurance carriers to launch competitive flood insurance solutions and subsequently mandated that mortgage companies accept private options to satisfy their mandatory flood insurance purchase requirements. This created an opportunity for private insurance carriers to enter the market with better coverage and service at a lower price to those interested in purchasing or required to carry, flood insurance.

So, before the 2020 hurricane season fully blows in, make sure to review your actual flood risk. Walk through scenarios and explore private alternatives that could save money and improve coverage for your insured’s greatest exposures. The bottom line: today’s market demands a thorough and thoughtful approach to flood coverage. Understanding the risk and knowing which options will offer protection when it’s needed most, that's the clear path.


Click HERE to find your home's FLOOD FACTOR, and learn how past floods, current risks, and future projections based on peer-reviewed research from the world's leading flood modelers



Hurricane Prep | Thimmesch Kastner Insurance | Lafayette LA

Topics: louisiana insurance, louisiana flood insurance, flood insurance

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