Mississippi Flood Insurance Purchases Low, Despite Wetter Rainy Seasons – And They’re Not Alone

Hundreds of homes and businesses were damaged by flooding, as heavy rains inundated Jackson, Mississippi over the Presidents Day weekend, pushing the Pearl River to its third-highest crest ever.

“If these heavier rainfall events increase in frequency, our rivers and streams are going to be responding in line too,” said Suzanne Van Cooten, hydrologist in charge of the National Weather Service’s Lower Mississippi River Forecast Center to the Wall Street Journal.

Federal data show last year was the second wettest on record across the continental U.S., and Mississippi’s river communities are keeping an eye on forecasts after an unusually early start to the 2020 spring flood season following a soggy 2019.

Yet flood insurance take-up rates remain low. “The alarming truth is that entirely too many Americans could protect themselves with flood insurance, but simply don’t know the extreme risk of devastation they are facing, or even worse, they are deciding to take their chances and ignore it, said Sean Kevelighan, Triple-I CEO.  “Triple-I’s recent analysis of National Flood Insurance Program’s (NFIP) data which is now illustrated in an interactive map of Mississippi counties along the Pearl River show some counties’ flood insurance take-up rates are as low as .01 percent. In other words, as much as 99.9 percent of people living in an active flood prone area are without any protection or recovery method. The intent of sharing this information is to encourage Americans to take more action to protect themselves by identifying the right insurance coverage, coupled with taking recommended precautionary measures, all of which are proven to dramatically boost their ability to recover from disaster.”

“Unacceptably low”

Flooding is the most common and costly natural disaster in the U.S., causing billions in economic losses each year.  According to the National Flood Insurance Program (NFIP), 90 percent of natural disasters in the U.S. involve flooding.  Flood damage is excluded under standard homeowners and renters insurance policies, but, flood coverage is available as a separate policy from the NFIP and from some private insurers.

Flood insurance was long considered an untouchable risk by private insurers because they didn’t have a reliable way to measure the risk. In recent years, however, modeling firms are getting better at assessing flood risk, and insurers have become more comfortable underwriting it.

Triple-I’s 2018 Pulse survey found 15 percent of U.S. homeowners had flood insurance, up from 12 percent who had the coverage in 2016. A McKinsey & Co. analysis found that as many as 80 percent of Texas, 60 percent of Florida, and 99 percent of Puerto Rico homeowners lacked flood insurance. Munich Re has called flood insurance take-up rates “unacceptably low.”

Reasons often cited for lack of coverage is that it is too expensive, that homeowners are not aware they don’t have it, and that people underestimate the risk of flooding.

At Triple-I’s 2020 Joint Industry Forum, FEMA Deputy Administrator for Resilience Dan Kaniewski and Weather Channel Hurricane expert  Dr. Rick Knabb, talked emphatically about the need for flood insurance – even where banks don’t require it to provide mortgages.

“When we at FEMA talk about ‘resilience,’” Kaniewski said, “we mean preparedness. We mean mitigation. We mean insurance. Insurance is the best resilience tool.”

Knabb agreed, calling upon meteorologists around the world to “talk about insurance more.” He also called on insurance agents to discuss flood coverage for their customers who aren’t in flood zones.

“If it can rain where you live,” he said, “it can flood where you live.”