Earlier this year, the National Oceanic and Atmospheric Administration (NOAA) predicted that the 2015-2016 El Niño would be among the three strongest since 1950. NOAA was correct. We have already seen devastating floods caused by the El Niño weather pattern in several parts of the nation and we expect to see more as the season continues. It is critically important that your agency offers flood insurance to all of its clients, since the risk of flooding is higher than normal this year. Offering flood insurance will not only protect your clients, but also your agency from potential errors and omissions exposure.
If we look at the two strongest El Niño seasons since 1950, which were the 1982-1983 and 1997-1998 seasons, they accounted for 37% of all of the flood insurance claims in California since 1978. On a nationwide bases, those two El Niño seasons collectively resulted in 350 deaths and more than $6 billion of losses, and those loss figures are not adjusted for inflation.
While homeowners and commercial property owners in high risk FEMA flood zones are required to buy flood insurance according to Federal Law if they have mortgages with federal-regulated lenders, homeowners and commercial property owners in high risk zones without mortgages and in moderate and low risk zones are not required to buy flood insurance. Even though most property owners in moderate and low risk zones do not buy flood insurance, claims in moderate and low risk zones account for more than 25% of all NFIP flood claims. There is more flood risk than you think in moderate and low risk zones, especially this year.
All of us need to take this El Niño season very seriously. If there is ever a time to buy flood insurance, this is it. Even if you or your clients only buy it for this year, it would be a very smart thing to do. If your agency needs help marketing flood insurance to its clients, we would be pleased to help you.
Contact us to learn how we can help you market flood insurance to protect your clients against flood damage and your agency from errors and omissions claims.