Allstate Study Warns on Coastal Floods

May 26, 2004

Allstate Insurance Company announced that a study it conducted in 2003 identified more than 750,000 homes in coastal hurricane states that may not have flood insurance. The study looked at current Allstate homeowners insurance customers living in or near “Special Flood Hazard Areas” to determine if they had also obtained flood coverage for their homes. It found “an alarming number of homeowners potentially unprotected from the peril of flood.”

“The Atlantic hurricane season, which begins June 1, conjures up images of powerful, damaging winds,” said the bulletin. “However, coastal flooding from storm surges and inland flooding from torrential rains can be equally damaging, more deadly and are often the forgotten force behind a hurricane.” It noted that during the 2003 Atlantic hurricane season, “22 percent of hurricane-related claim dollars paid to Allstate customers were for damages caused by flooding. Those claim dollars were paid through the National Flood Insurance Program to customers that had purchased flood insurance.”

Allstate said that in 2003 customers in 14 states and the District of Columbia filed 114,600 claims for damage to their homes resulting from two hurricanes making landfall in the U.S. Out of a total of $230 million paid to those customers, “2,741 were flood damage claims from customers with flood insurance totaling more than $51 million.”

“Two percent of Allstate’s claim volume accounted for 22 percent of the total dollars paid to Allstate homeowners insurance customers following hurricanes Claudette and Isabel in 2003,” noted Allstate assistant VP Jeffrey Deigl. “This is a vivid illustration of why homeowners need to consider flood insurance, and now is the time to make that consideration because a federally mandated 30-day waiting period for purchasing flood insurance could leave you dangerously unprotected if you wait until a hurricane is coming.”

The bulletin also pointed out that consumers should be aware that “most homeowners, commercial and renters insurance policies do not cover flood damage. Homeowners may need separate flood insurance coverage to protect against losses from floods during hurricanes or anytime of the year.”

It also gave details of how to obtain coverage through local Allstate agents, and how the Federal Government’s National Flood Insurance Program (NFIP) provides flood insurance nationally.

Finally the study found that “the average flood insurance dollars paid to Allstate customers following hurricanes Isabel and Claudette was $18,727. Deigl stated that homeowners need to ask themselves if they could afford that expense without flood insurance. “Purchased separately from your homeowners, renters or commercial policies, a flood policy can help complete the insurance protection for your property,” he concluded.

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