Underinsurance
According to a fact sheet from the Insurance Information Institute, a number of studies show that Americans are underinsured against natural disasters. Millions of homeowners are said to have inadequate cover. Here are a number of statistics from the RAND Corporation, the Chubb Group of Insurance Companies, and the Mason Dixon poll:
Only 14 percent of the nation has flood insurance.
Only half of the most vulnerable homes have flood insurance.
One third of American homeowners have not reviewed their homeowner’s insurance policy in more than three years.
Half of all American homeowners incorrectly believe they are automatically covered against flood.
Only 20 to 30 percent of flood-vulnerable homes in the Northeast and Midwest purchased the required insurance.
One quarter of NFIP claims paid originate from non-Special Flood Hazard Areas, but only one percent of non-flood zone homes are covered despite risk.
Even after the destruction caused by Hurricane Katrina, flood insurance has not increased considerably. This is alarming, as more and more people have moved to coastal counties over the past three decades. The good news is that the additional flood insurance is well within the reach of most homeowners.