Tuesday, August 19, 2008

Americans Still Confused about Flood Insurance, Lack Coverage

The severe hurricane season of 2005 should have been a wake-up call to Americans about their lack of flood insurance.
But a new survey conducted for the Insurance Information Institute (I.I.I.) shows that more than 25 percent of Americans still mistakenly believe that damages caused by flooding from a hurricane are covered under standard homeowners and renters policies.

The survey asked, “Does your homeowner’s policy cover damage from flooding during a hurricane?” Twenty-seven percent said yes, and in the South, a region more vulnerable to hurricanes, 39 percent said yes.

Only 17 percent of Americans have a flood insurance policy, the survey showed—an inadequate number of insureds, given where they live. According to the Federal Emergency Management Agency (FEMA), more than 90 percent of all U. S. natural disasters include flooding. Changing weather patterns, increased urban development, and the leveling of forests have reduced the land’s natural ability to absorb water. For instance, large-scale erosion and flooding after severe wildfires are common in mountainous or hilly terrain.

The I.I.I. wants to remind homeowners and renters about some facts regarding flood insurance:

1. Flood damage is excluded under standard homeowners and renters insurance policies. Flood coverage, however, is available as a separate policy from the National Flood Insurance Program (NFIP) and from some private insurers. Nearly 100 insurance companies write and service NFIP policies.


This excerpt was written by U. S. Insurance News
Monday, 18 August 2008

View the original news article