Number of the Day: 15%
Our take on the most relevant or interesting figure in personal finance today
That’s how many homeowners in the U.S. are estimated to have flood insurance—the only type of insurance that typically covers storm surge or other flooding caused by hurricanes.
As Hurricane Laura intensifies in the Gulf Coast, catastrophic storm surge is predicted in areas of Texas and Louisiana. And while wind damage is often covered by standard homeowner policies, flooding from storm surge is not. Separate flood insurance, available through FEMA’s National Flood Insurance Program or from private insurers, must be purchased. This is particularly important because homeowners may not realize they are vulnerable to flooding. More than 40% of all NFIP claims between 2014 and 2018 were outside of high-risk flood areas, according to FEMA.
The 15% of U.S. homeowners, based on the Insurance Information Institute’s 2018 Pulse survey, is a slight increase from 2016, when an estimated 12% of homeowners had separate flood insurance.
Hazard modeling group Enki Research estimates Laura will have an economic impact of $20 billion to $25 billion, potentially putting it in the same league as Hurricane Rita, which devastated the region in 2005.