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April 29, 2020

An Ounce of Prevention Could Save Billions: Reduce your flood risks

WASHINGTON (April 29, 2020) -- In the last 10 years, flooding cost the U.S. $40.3 billion in damages. This does not include the damage associated with tropical cyclones, which represented an additional $431.3 billion, according to the National Oceanic and Atmospheric Association (NOAA). 

NAIC President and South Carolina Department of Insurance Director, Ray Farmer, is encouraging national residents to reduce their flood risk by leveraging flood loss avoidance. 

The Federal Emergency Management Agency (FEMA) confirms many flood insurance policies provide compensation up to $1,000 for reasonable expenses incurred to protect insured property prior to a flood and up to $1,000 to move insured property to a safe location in advance of an imminent flood. To receive reimbursement, policyholders should save receipts for sandbags, water pumps, plastic tarping, lumber and labor associated with loss mitigation efforts.

"Rather than facing devastating property loss or costly repairs following a natural disaster, homeowners and renters can minimize risk through preventative measures," Ray Farmer says.

FEMA's 2018 Federal Insurance and Mitigation Administration Fact Sheet says according to an analysis by the National Institute of Building Sciences, the natural hazard mitigation saves $6 on average for every $1 spent on federal mitigation grants. Plus, reducing a property's exposure to flooding may also lower flood insurance premium rates in some instances.

Additional flood risk reduction measures include:

  • Raising properties to elevations above the flood zone.
  • Clearing debris from gutters and downspouts.
  • Elevating electrical panels, appliances, switches, sockets, wiring and heating systems to 12 inches above the base flood elevation. This prevents electrical fires resulting from short circuits in flooded systems, as well as damage to the electrical system.
  • Ensuring basements are waterproofed and sump pumps are charged, working and have a backup power supply available.
  • Installing a water alarm to provide an alert when water begins accumulating in the basement.

Additionally, the NAIC recommends purchasing flood insurance and taking preventative measures to reduce risk, such as those outlined through the Insurance Institute for Business and Home Safety's Fortified Home program and online in FEMA's Guide to Retrofitting. Remember, flood is not covered in standard homeowners policies. Most flood insurance policies need to be purchased 30 days prior to a flood event, so it is a good idea to purchase flood insurance now.​


About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.