Massive Flooding In South Carolina; Many Consumers Lack Flood Insurance

Massive Flooding In South Carolina; Many Consumers Lack Flood Insurance

I.I.I. Offers Facts, Figures and Analysis on Floods and Insurance


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NEW YORK, Oct. 5, 2015 /PRNewswire-HISPANIC PR WIRE/ — The catastrophic floods in South Carolina over the weekend provide 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.). In fact, most U.S. natural disasters declared by the president involve flooding.

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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 $100,000 for personal possessions. For businesses the coverage is $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 those 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. The NFIP provides detailed information for individual cities and counties.

None of the 10 largest floods (as ranked by NFIP payouts) occurred in South Carolina. However, the state was affected by three of the most costly U.S. hurricanes: Hurricanes Charley and Frances in 2004 and Hurricane Hugo in 1989. The I.I.I. has a detailed fact file on hurricane insurance in South Carolina.

The two largest NFIP payouts came from Hurricane Katrina in 2005 ($16.3 billion) and superstorm Sandy in October 2012 ($7.9 billion as of August 2015).

TOP 10 MOST SIGNIFICANT FLOOD EVENTS BY NATIONAL FLOOD INSURANCE PROGRAM PAYOUTS (1)

Rank

Date

Event

Location

Number of

paid losses

Amount paid

($ millions)

Average

paid loss

1

Aug. 2005

Hurricane Katrina

AL, FL, GA, LA, MS, TN

167,971

$16,316

$97,134

2

Oct. 2012

Superstorm Sandy

CT, DC, DE, MA, MD, ME, NC, NH, NJ, NY, OH, PA, RI, VA, VT, WV

129,235

7,946

61,482

3

Sep. 2008

Hurricane Ike

AR, IL, IN, KY, LA, MO, OH, PA, TX

46,589

2,689

57,713

4

Sep. 2004

Hurricane Ivan

AL, DE, FL, GA, LA, MD, MS, NJ, NY, NC, OH, PA, TN, VA, WV

28,290

1,612

56,964

5

Aug. 2011

Hurricane Irene

CT, DC, DE, MA, MD, ME, NC, NH, NJ, NY, PA, RI, VA, VT

44,228

1,337

30,226

6

Jun. 2001

Tropical Storm Allison

FL, LA, MS, NJ, PA, TX

30,784

1,107

35,955

7

May 1995

Louisiana Flood

LA

31,343

585

18,667

8

Aug. 2012

Tropical Storm Isaac

AL, FL, LA, MS

11,992

548

45,728

9

Sep. 2003

Hurricane Isabel

DE, MD, NJ, Y, NC, PA, VA, WV

19,931

500

25,072

10

Sep. 2005

Hurricane Rita

AL, AR, FL, LA, MS, TN, TX

9,528

475

49,820

(1) Includes events from 1978 to June 30, 2015, as of August 21, 2015. Defined by the National Flood Insurance Program as an event that produces at least 1,500 paid losses. Stated in dollars when occurred.

Source: U.S. Department of Homeland Security, Federal Emergency Management Agency; U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Hurricane Center.

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. Eleven percent of homeowners in the Northeast had a flood insurance policy. Nine percent of homeowners in the West had a policy, and 10 percent of homeowners in the Midwest had one.

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Massive Flooding In South Carolina; Many Consumers Lack Flood Insurance