By John Dickson, CEO and president of Aon Edge
The peril of flood has been and always will be complex and dynamic. From urban flooding in unexpected areas to wildfires in drier climates that set the stage for mudslides, the question of when and where a flood is most likely to occur is difficult to answer. But what has become clear is that many people unknowingly face a more elevated flood risk than they did just 10 years ago. Simply relying on Federal Emergency Management Agency (FEMA) flood risk maps (some of which are several decades old) doesn’t adequately equip homebuyers and their agents with the current information necessary to assess the risk of flooding to a specific property.
During this hurricane season and beyond, agents play a more influential role than you might realize. Follow these steps to help ensure both you and your clients are fully aware of their true flood risk.
Become an informative resource about the hidden risks of flooding and how they impact your community.
Flooding is the most common and costly disaster in the United States. Agents must look at factors that impact flooding beyond designated flood zones. Flooding isn’t confined only to land touching rivers, lakes or salt water—everyone lives in a flood zone.
These flood zones broadly fall into one of two categories:
- Those where flood insurance is required by federally backed lenders
- Those where flood insurance is not required
But know that where it rains, it can flood. Water does not stop at the artificial lines that define where flood insurance is required and where it is not.
Provide the facts about the insurance protection gap.
The high economic cost of floods, juxtaposed by a substantially smaller amount of insured loss payment, highlights the magnitude of the flood protection gap in our country.
According to Aon, last year, flooding in the U.S. cost $7 billion in economic loss, but just $2.8 billion of that loss was insured.
Too often, consumers turn to their homeowners’ policies to file flood loss claims only to learn they don’t cover flood-related damage. Educate your client today to avoid unpleasant surprises tomorrow.
Connect your clients with flood risk professionals.
We must stop thinking about flood risk in binary terms and start thinking about flood as a risk with multiple facets. Unlike other catastrophes, every state in the country can experience flooding, according to the NOAA National Severe Storm Laboratory. You can make a difference by connecting with flood risk professionals, such as local floodplain managers or home inspectors, who can answer questions about flood risk and offer options to help manage and mitigate that risk. Once your clients have the information they need, make sure they talk with an insurance agent who can help them discuss their flood insurance options.
The idea of “it won’t happen to me” is never a valid risk-management strategy. It’s critical for homeowners to be honest with themselves about their flood risk and exposure and their readiness to respond to the unexpected. And as a real estate professional, you can equip them with the resources they need to help protect their homes, their businesses and, ultimately, their livelihoods.
For more tools to help understand flood maps and zones, visit floodsmart.gov.
Photo: iStock.com/onurdongel
