In the last several years, many areas in America have been hit hard by natural disasters such as hurricanes and massive wildfires. Two areas in particular have been in the Northeast and in Colorado, which is where the National Flood Insurance Program (NFIP) has cited there have been the biggest flood insurance increases.
As a result of the devastation in the wake of Hurricane Sandy in October 2012, New York had the largest growth in flood policies between September 2012 and September 2013. According to reports from the NFIP, flood insurance policies in New York increased to 194,650, a growth of 15.5 percent. Clearly, many New Yorkers felt the imminent need to get protection after the storm surge they endured during Sandy.
The president of the New York Insurance Association (NYIA), Ellen Melchionni, expressed that in the aftermath of Hurricane Sandy, many New Yorkers unfortunately became aware of the serious consequences of not having flood insurance coverage. She noted that New Yorkers responded similarly after Hurricanes Irene and Lee, but not to the same extent.
Although Melchionni said that the NYIA is optimistic about the flood insurance increases in New York, there’s still a significant lack of homeowners who have actually invested in flood insurance. According to reports, throughout all of the high-risk areas for flooding in New York, only 25% of properties in those areas have flood coverage. In areas that are low-to-moderate risk, only 24% of properties have flood insurance policies. There’s some consideration that the only reason so many New Yorkers have recently obtained flood insurance is to comply with the conditions of receiving federal financial assistance after the disasters. Many Federal Emergency Management Agency (FEMA) policies require participants to maintain a flood insurance policy to continue receiving financial assistance.
Across the nation, flood insurance increases only averaged 0.5 percent in the past year. The states that had the most insurance policy growth, after New York, were Connecticut, Colorado, New Jersey, and Massachusetts.
In our next post, we’ll investigate more of the NFIP findings after the recent natural disasters that have hit the United States.