Helping Your Clients Understand Flood Risks During Hurricane Season

Helping your clients understand flood risks during hurricane season is essential to assist them in overcoming issues. Despite what flood maps might tell you, almost any piece of property‒including your clients’‒is at risk for flooding.

Identifying Flood Risks During Hurricane Season

Flood map models identify regions that have a high risk of flooding. Insurance companies typically rely on these maps to remain updated on the latest information on flood risks in particular areas. It enables them to offer their clients the assurance and insurance solutions they require. It typically includes excess flood insurance and a safety net for their client’s finances and properties.

Spring is usually when the rainy weather begins in many parts of the U.S. The Insurance Information Institute revealed that only 27 percent of homeowners in the country have adequate flood coverage. 

It is alarming considering that the number of areas affected by floods may increase every decade because of climate changes, rising sea levels, and increased hurricane risk. Many clients don’t realize the severity of the problem and rely only on NFIP. One of the responsibilities of insurance brokers is to educate their clients on the seriousness of flood risks and the importance of getting excess flood insurance.

What Factors Can Influence Flooding

Flood-risk areas are locations with two or more acres of normally dry land with two or more properties affected by water or mudflow. According to FEMA, even an inch of water in a particular piece of property can cause more than $25,000 to repair.

Who’s at Risk?

Properties located near bodies of water are especially prone to flooding. It includes low-lying areas and those near the coastline and impacted sewer systems. Many properties in New York City are at high risk for flooding as it is the number one storm surge-prone metropolis in the U.S.  

How to Know if Flooding is a Risk in a Location

FEMA plots maps of regions with the greatest danger of flooding. These areas need flood insurance due to the increased risk of flood-related losses and damage.

However, the flood zone maps provided by FEMA are often outdated and inaccurate. Many property owners don’t realize that FEMA developed its flood insurance rate map in 2013. It means that even if the FEMA map indicates that a house is in a low-risk zone, the actual chance of flooding could be considerably higher. 

Is the Standard Homeowner Policy Enough?

Standard homeowner’s policies typically won’t cover all the damage caused by floods, which may often exceed $250,000. NFIP policies generally offer low coverage limits and don’t cover the cost of external constructions, replacement, or temporary living expenses if the property owner has to relocate due to flooding. 

Furthermore, the financial assistance FEMA offers isn’t free. They may be small loans that don’t cover all damages or government loans. Then, FEMA expects payment back at standard rates.

What Should Brokers Do?

Insurance brokers are responsible for protecting their clients against the threat of floods. To safeguard against these risks, they should provide their clients with insurance quotes considering flood risk.

Brokers should be able to assure customers that they’re in good hands. It involves awareness of all the possible risks so they can educate their customers on what they require and offer an appropriate solution.

About Snyder Specialty

Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.