More than four in five Americans (81 percent) know that a standard homeowner’s insurance policy doesn’t cover flood damage, according to new research from Bankrate.com. However, a similarly vast majority have not acted upon this key information.
A 2012 poll by the Insurance Information Institute found that only 13 percent of American homeowners had a flood insurance policy. The Federal Emergency Management Agency (FEMA) and its National Flood Insurance Program (NFIP) identify flooding as the United States’ No. 1 natural hazard.
FEMA usually classifies properties as either high flood risks or low-to-moderate flood risks. Bankrate.com asked Americans whether or not they know the correct classification for their home and only 51 percent said they know the correct risk category.
“This is a classic ‘do as I say, not as I do’ situation,” said Doug Whiteman, insurance analyst, Bankrate.com. “The vast majority of Americans know the key facts about flood insurance, but they haven’t taken the necessary steps to protect their homes.”
Whiteman says that homeowners should first ensure that they know their home’s correct FEMA flood risk designation. Next, they should review their homeowner’s insurance policy and investigate the cost and availability of a separate flood insurance policy. He says that it may be much cheaper than people expect.
“The average flood insurance policy costs about $50 per month, so for roughly the cost of dinner and a movie, consumers can protect themselves against disaster.”
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:
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