Facts and Figures on Flood Insurance from the Insurance Information Institute
FOR IMMEDIATE RELEASE
New York Press Office: (212) 346-5500; media@iii.org
MASSIVE FLOODING IN SOUTH CAROLINA, MANY PEOPLE WITHOUT FLOOD INSURANCE
I.I.I. Offers Fact, Figures and Analysis on Flood Insurance
NEW YORK, October 5, 2015 — The deluge of flooding in South Carolina is a stark reminder that flooding is the most common and costly natural disaster in the United States, causing an average of $50 billion in economic losses each year, according to the Insurance Information Institute (I.I.I.).
Flood damage is excluded under standard homeowners, renters and business insurance policies. However, flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers. There is a 30-day waiting period before flood insurance goes into effect. The optional comprehensive portion of an auto insurance policy provides coverage for flood-related damages.
The NFIP provides coverage for up to $250,000 for the structure of the home and up to $100,000 for personal possessions; and $500,000 for a commercial structure and $500,000 for its contents. Private flood insurance is available for those who need additional insurance protection, known as excess coverage, over and above the basic policy or for people whose communities do not participate in the NFIP. Some insurers have introduced special policies for high-value properties. These policies may cover homes in noncoastal areas and/or provide enhancements to traditional flood coverage.
As of July 31, South Carolina had 199,540 NFIP policies in force, with written premium in force of $133.4 million covering $50.8 billion in property and contents. A breakdown by county can be found here: http://bsa.nfipstat.fema.gov/reports/1011.htm#SCT.
South Carolina was impacted by three of the most costly hurricanes – Hurricanes Charley and Frances in 2004 and Hurricane Hugo in 1989. Despite the constant reminder through catastrophes, many homeowners and businesses owners fail to purchase flood insurance.
A 2015 poll by the I.I.I. found that only 14 percent of American homeowners had a flood insurance policy. This percentage has been at about the same level every year since 2009. The percentage of homeowners with flood insurance was highest in the South, at 21 percent, compared with 20 percent in 2014. Eleven percent of homeowners in the Northeast had a flood insurance policy, which is unchanged from 2014. Nine percent of homeowners in the West had a flood insurance policy, compared with 8 percent in 2014, while 10 percent of homeowners in the Midwest had flood insurance, compared with 7 percent in 2014.
Superstorm Sandy, which occurred in October 2012, resulted in $7.9 billion in NFIP payouts as of August 2015, second only to 2005’s Hurricane Katrina with $16.3 billion in payouts.
A 2013 study of coastal areas by CoreLogic found that 4.2 million homes, with $1.1 trillion in total property exposure, are at risk of damage caused by hurricane storm surge flooding. In the Atlantic Coast region alone, there are approximately 2.4 million homes at risk, valued at more than $793 billion. Total exposure along the Gulf Coast is $354 billion, with 1.8 million homes at risk for potential storm-surge damage. Standard homeowners insurance does not cover property damage from storm surge.
TOP 10 MOST SIGNIFICANT FLOOD EVENTS BY NFIP PAYOUTS http://www.iii.org/fact-statistic/flood-insurance
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For more information, contact the South Carolina Insurance News Service at 803-252-3455 or use our contact form.