 By Kent Sullivan
Insurance Commissioner
We often hear
the question: Do I really
need flood insurance? There are about 5 million homeowners policies in
Texas, but fewer than 750,000 federal flood policies. That means less
than 16 percent of homeowners are covered for flood damage in a state
with 367 miles of coastline and “Flash Flood Alley” in Central Texas.
Insurance
agents can help change this. As we approach the two-year anniversary of
Hurricane Harvey, let’s remind consumers: If it can rain, it can flood.
Floods can happen anywhere. A Houston Chronicle analysis found that
almost three-quarters of the homes flooded by Harvey were outside
federally designated high-risk areas. It’s worth repeating to consumers
that most home insurance policies don’t cover flooding.
Whether
working with a new client or an existing one, always discuss flood
insurance. Even if someone’s home has never flooded, the risk can change
over time. Development, loss of grasslands, and even a neighbor’s new
privacy fence could increase the flood risk for a home.
The National
Flood Insurance Program answers common consumer questions in its “Why You Need Flood Insurance”
publication. You may find this information helpful when talking with your
clients.
We find that
many homeowners overestimate the cost of flood insurance. Most homeowners
can buy a federal flood policy for less than $500 a year for property
outside of high-risk flood zones. Renters will find contents-only
policies that cover their belongings at an even lower cost.
History has
unequivocally shown that a lack of flood coverage is a serious problem
for consumers. Insurance agents are in a unique position to educate
people about flood risks and how to protect their financial interests. Given
what’s at stake, we owe it to Texans to have that discussion.
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