Neptune Flood: 20M Homes at Flood Risk, but Only 3.8M Insured

(Image courtesy of Tom Fisk/pexels.com)

Neptune Flood, St. Petersburg, Fla., released an analysis of the U.S. residential flood insurance market, finding that while 20 million U.S. homes are at moderate-to-severe flood risk, only 3.8 million are insured.

Overall, 97% of residential structures remain uninsured. The primary private flood insurance market covers an estimated 500,000 residential buildings.

The top states by percentage of insured residential structures are Louisiana, at 24.5%, Florida, at 18%, South Carolina at 8.8%, Texas at 8% and New Jersey at 6%.

The top five states by total uninsured residential structures are California (9.48 million); Texas (7.92 million); Florida (6.66 million); Pennsylvania (4.31 million) and New York (4.27 million.)

The flood insurance market–with the National Flood Insurance Program, various state rules and regulations and private companies–is complicated. And, the percentage of insured residential structures has significantly declined in most states over recent years.

Neptune Flood pinpointed some of the reasons behind declining rates, including lack of consumer awareness—many U.S. property owners mistakenly believe their homeowners’ insurance includes flood damage, and many others believe they are not at risk of flooding in their area.

Additionally, the increasing cost of flood insurance from NFIP, inflation and inadequate enforcement of flood insurance regulations or other regulatory noncompliance play a role.

And, some buying trends may affect the density of coverage. There’s been an increase in all-cash sales recently; many of those deals may not have the same mandatory purchase requirements for flood insurance. Also, older homeowners–who are making up a larger chunk of buyers–are more likely to be unaware of flood risks, Neptune Flood reported finding in a past survey.