Most flood losses in the US go uninsured
70% of annual flood losses in the USA, totaling $17B, are uninsured, with low-income communities bearing the brunt.
Why it matters
- Highlights a significant gap in flood insurance coverage.
- Shows that most at-risk households are underinsured.
- Emphasizes the disproportionate impact on low-income communities.
By the numbers
- 70% of annual flood losses, about $17.1 billion, are uninsured.
- 88% of at-risk households are underinsured.
- Average underinsurance is $7,208 per year per household.
The big picture
- Underinsurance persists both inside and outside special flood hazard areas.
- Suggests frictions in the provision of risk information and regulatory compliance.
- At least 70% of at-risk households would benefit from purchasing flood insurance.
What they're saying
- Commenters suggest the current system benefits insurance companies' profit margins.
- Some question how the system could change without government intervention.
- Personal anecdotes and academic verification are discussed in the comments.
Caveats
- The study points to issues in risk information and regulatory compliance.
What’s next
- Further government intervention might be needed to address the insurance gap.
- More research could help understand the root causes of underinsurance.