The perception that homeowners and renters do not understand that their homeowners insurance policies do not cover flood damage is a reality for nearly half of Americans, according to a survey commissioned by Allstate Insurance Company.
The survey of residents with homeowners and renters insurance from a variety of carriers shows 44 percent believe they are covered for weather-related floods, but only 15 percent said they actually bought a flood insurance policy through the National Flood Insurance Program.
“Unfortunately, we have seen this scenario play out following a number of major disasters. Some people believe flood is part of their standard homeowner policy and sadly, don’t realize they need a separate flood policy until it’s too late,” said Mark Green, senior vice president, Allstate, commenting on the “knowledge gap” in a statement announcing the results.
Flood insurance is offered through the federal government’s National Flood Insurance Program and policies are sold and managed by private insurance companies like Allstate.
The study was based on telephone interviews with a nationally representative sample of 1,000 residents with homeowners or renters insurance, age 18 years and older across the United States. Interviews were conducted May 16-17 & 19, 2012 by FTI Consulting for Allstate.
Allstate released the results in conjunction with National Flood Safety Awareness Week, and published a list of preparation tips for property owners from the Insurance Institute for Business and Home Safety.
Nearly 20 percent of flood claims come from moderate to low-risk flood zones, and flood occur in all 50 states, Allstate said.
The average flood loss cost is $30,000 for homeowners and $75,000 on commercial property, Allstate said, citing figures from the NFIP.