What Does Flood Insurance Say About Hurricanes?

Tens of thousands of people who live along the Atlantic Coast and the coast of the Gulf of Mexico have had their home insurance prices rise or be taken away elsewhere. Insurance companies find the losses too high, and reinsurance companies will not back the insurance companies financially. 

When Is A Climate Crisis A Financial Crisis?

The primary reason for the change in insurance rates is that hurricanes have often become more powerful and frequent. This hurricane season is forecast to be among the most dangerous in history. 

What do insurance policies say about hurricanes?

Residential insurance often covers wind damage. However, in hurricane-prone areas, the cost of that wind insurance may be significantly high. Flood damage is rarely covered. This included storm surges. Deductibles for homes in areas affected by hurricanes can be prohibitively high. 

Prices Too High

According to FEMA, “Standard insurance policies do not cover flooding, but flood insurance is available through the National Flood Insurance Program.” The National Flood Insurance Program was created in 1968 to cover flood losses and restrict or prevent residential buildings from being in floodplains.

Finally, people can alter their homes. FEMA reports, “Many insurance companies encourage their policyholders to retrofit their homes to resist wind-related damage, and some companies have established discount programs to reduce premiums, or other types of financial incentives, to reflect the risk reduction for homes that have been properly retrofitted.”

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