Flood insuranceComprehensive flood insurance

Insurance is a valuable recovery tool for individuals and communities impacted by disaster. While it doesn’t prevent the unexpected from happening, it does provide financial peace of mind, a safety net when disaster occurs. Insurance offers critical financial protection and resources that Federal Emergency Management Agency (FEMA) assistance programs do not provide. For example, in Texas after Hurricane Harvey in 2017, average FEMA payouts for individual assistance were $4,000, while average FEMA payouts for flood insurance were $110,000. FEMA recommends all homeowners with properties in flood prone areas purchase flood insurance. Despite the known financial benefits of flood insurance, there is a large and persistence flood insurance gap in the nation.

Recognizing the benefits of widespread purchase of flood insurance, FEMA has adopted a goal of doubling the number of properties with flood insurance by 2023. Many people who own properties in flood prone areas find the flood insurance buying process to be complicated with only a few options. FEMA’s National Flood Insurance Program (NFIP) underwrites the majority of residential flood insurance policies in the U.S. However, over the past several years, a small private market for residential flood insurance has emerged. Policymakers in the U.S. have expressed interest in having more data on this small community of residential insurance providers to understand if this market could help meet the policy goals of increasing the number of homeowners with flood insurance or offering more affordable coverage. The question is whether private insurance is covering the flood insurance gap and increasing the number of insured.