While it’s true that Hurricane Florence did indeed leave vast tracts of North Carolina submerged under stormwater and surge, according to Chief Executive of the NFIP, David Maurstad, the number of claims total slightly over 14,000 to date. The reason for such a low number of claims in such a devastated area is not low simply because those affected were reluctant to contact Uncle Sam for a little financial help, but more that they simply opted not to purchase the insurance in the first place, despite living or owning a business in a flood-prone area.

According to the NFIP, as of 2016, there were only 128,350 flood insurance policies in place. Maurstad, whose list of accomplishments include a former mayor, lieutenant governor, and legislator for the state of Nebraska and current deputy associate administrator for insurance and mitigation for the Federal Emergency Management Agency, was in Asheville to speak at a conference of floodplain managers being held at the Crowne Plaza Resort.

Maurstad runs a number of programs including the National Flood Insurance Program, which continues to come under criticism for not making property owners pay a high enough premium to cover the cost of the program. The NFIP has also come under strong criticism for making it too easy for homeowners in areas that are prone to flooding to rebuild their flood-damaged homes over and over each time it is damaged at a substantial cost to U.S. taxpayers.

Back in 2012, Congress authorized a significant increase in NFIP premiums with an eye to bringing them more in line with the cost of claims. However, following two years of complaints and protests by homeowners, Congress backed down on the increases. Instead, Congress decided to forgive $16 billion worth of debt the NFIP owed to the Federal Treasury. Maurstad states that the NFIP has a reserve of $5.9 billion on hand to pay claims, which should be plenty to deal with the aftermath of Hurricanes Michael and Florence. Yet according to critics, the NFIP is $20 billion in debt. They also go on to say that the challenges faced by the program are only going to become worse in time due to the changes in climate we are experiencing.

According to environmental advocacy group The National Resources Defense Council, FEMA spends only $1.72 to help relocate people out of the flood zones per $100 it spends paying out on flood claims. The NRDC likes to refer to this as “flood, rebuild, repeat.” What the government needs to do, is to invest more in mitigation or methods to reduce the amount of damage caused by such natural disasters. While it may be hard to exclude anyone from a government program, it may become necessary to do so for those with property in areas that are likely to keep flooding over and over.

According to critics, those who live on the coast have found they can file time after time and keep rebuilding. However, those who have property inland are more likely not to invest in coverage.

These are some of the most common reasons given for not purchasing flood insurance:

• Don’t understand the risk – many don’t understand their risk of flooding and don’t take the time to find out if they need flood insurance.
• Many lenders don’t require flood insurance – if you live in a flood prone area you and have a federally-backed mortgage, you will be required to purchase flood insurance. But, if the area your home or business sits on is in an area that “might” flood, this type of insurance is optional.
• Uncle Sam’s got your back – far too many people believe Uncle Sam will bail you out, even if you don’t have insurance. While FEMA will help, if you don’t have insurance you are likely to find you only get a fraction of your losses and it can take months to arrive.
• My homeowner’s insurance has me covered – virtually all homeowner’s insurance policies do not cover flooding.
• I can’t afford it – the majority of those who need flood insurance the most are lower income and believe they can’t afford it, yet they can’t afford to be without it.

Are you an insurance agent looking for more flood options than the NFIP? Flow Insurance Services can get you access to over a dozen private flood carriers. Private flood is often less expensive than the NFIP, the coverage is just as broad or broader, and there are no coverage caps like NFIP policies. Flow knows private flood and we know it well! Join with Flow to offer your clients more options when it comes to flood insurance.