Why is Flood Insurance So Important?

reThoughts from an Underwriting Intern

Hello everyone! ??

Last week, I mentioned that my fellow interns and I were tasked with a mini project: explaining to clients why they need flood insurance. I presented my pitch on Friday, and I think it went well! Here are some key points I discussed on why you need flood insurance:

1. ?? Flooding can be extremely severe and is very common! It is the #1 natural hazard in the U.S.
2. ?? Everyone is financially vulnerable to flood losses, not just those in flood zones. In fact, 25% of flood claims come from low-risk areas.
3. ?? Even though many believe they are already covered by a commercial property or homeowners policy, this is not the case! These policies typically exclude flood coverage.
4. ?? Flood insurance is the best way to protect yourself financially from flood loss. Not everyone gets accepted by federal aid, and if they do, it’s either in the form of a loan (that you have to pay back with interest) or it is not enough to cover the entirety of the loss. You don’t have to pay back claims; once you pay your premium, you’re covered.
5. ?? Flood insurance helps you recover quickly from a loss, ensures your home retains its value, assists in avoiding expensive repairs, replaces damaged personal property, helps you avoid financial hardship, and gives you peace of mind.

After my pitch, I answered some questions from my “clients,” aka my wonderful mentors Safi Ahmed, ARM , Sean O'Neill , Melissa Lynch , and Joe S. . They asked me about common misconceptions regarding floods and flood insurance. For example, “My store has never flooded! Why would I need coverage?” To answer this question, I explained that even if you are in an area that is not flood-prone, anyone can be financially vulnerable to floods. Our planet has been undergoing intense climate changes in recent years, causing an increase in extreme weather events like hurricanes and heavy rainfall. So, even if your store has never flooded, conditions change, and the possibility of experiencing a flood loss is still present.

This project helped me learn more about the sales side of flood insurance and gave me some great practice for teaching others about the importance of flood insurance. I can’t wait to continue learning as I finish up the summer!

Until next time, I hope everyone has a wonderful rest of their week!