Three-quarters of Americans think they don’t need flood insurance, according to a new study.
This spring’s flood season is forecast to be worse than average, affecting some 128 million Americans. But according to a recent survey National Flood Services (NFS) 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.
Although 62% of respondents consider themselves “prepared” for flood damage, 49% said they 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% have flood insurance, and 74% believe that they don’t need it.
That’s a dangerous misconception since 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 will affect 40% of the population, followed by an above-average hurricane season.
Helping Customers Understand the Realities of Flood Exposure
Agents play a critical role in educating homeowners about floods. Moreover, homeowners appreciate it. As many as 75% 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.
Given the economic shocks caused by COVID-19, these conversations are more important than ever. Before the pandemic, as many as 78% 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.
Helping Americans Avoid Flood Disaster in 2020
Outdated perceptions about flood risks paired with low awareness about the cost of flood damage make for a potentially devastating combination—especially when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:
1) Learn the basics of flood insurance. This process is quick and simple with NFS’s educational flood materials.
2) Start a conversation with your policyholders. For best results, follow NFS templates and use a risk assessment tool.
3) Get instant quotes. Most customers can be quoted in seven questions or less.
It’s not too late for agents to help customers prevent the worst effects of flood damage. With support from NFS’s digital educational library and sales toolkit, agents can make life better for every customer they serve.