It’s bad enough that the heavy rainfall and massive flooding that began in Louisiana on Aug. 12 has damaged more than 50,000 homes. There’s also this: A relatively small amount of businesses and families affected by the catastrophe have flood insurance, according to an RMS assessment.
As the catastrophe modeling firm has noted, flooding has been particularly severe in the Louisiana parishes of Livingston (39,000 homes flooded), Ascension (15,000 homes flooded), East Baton Rouge and Tangipahoa.
On the plus side, Louisiana has the third-highest number of National Flood Insurance Program policies in force, with 452,000 as of June 2016, according to RMS. But only 12 percent of businesses and homes in East Baton Rouge Parish and Tangipahoa Parish are covered by flood insurance. The number is better in Ascension and Livingston parishes, with 23 percent coverage, but just 1 percent of property owners in St. Helena parish have flood insurance, RMS noted.
“Flood insurance penetration is low, especially in affected parishes,” RMS said. “It’s expected that many properties sustaining damage from these floods are either uninsured or underinsured for flood, resulting in reliance on federal disaster grants in parishes declared as major disaster areas.”
With this in mind, RMS said that the catastrophe and its aftermath in Louisiana “stresses the importance of understanding what, if any, flood coverage is included in a standard homeowner policy and serves as yet another warning to those considering dropping or forgoing flood insurance.”
Jeff Waters, a meteorologist and flood risk expert at RMS, noted in prepared remarks that Louisiana was already having one of the top 20 wettest years on average before the floods hit.
RMS hasn’t yet issued a loss estimate but will continue to monitor conditions in Louisiana.