Record Flood Losses – Will They Save or Drown Flood Insurance?

A new report details the cost and extent of one of the worst years for floods in recent history.
 
CoreLogic estimates flood losses in the U.S. this year at approximately $10.67 billion, three times the amount forecast for next year, based on various flooding and storm events recorded in the National Climate Data Center.

CoreLogic suggests that flood insurance coverage to be expanded to protect more territory. The floods of 2011 heightened awareness of the flood risk outside of the FEMA 100-year flood zones, the report states. There has also been an emphasized need to raise current flood protection standards for the critical and strategic infrastructures in the U.S.

Based on the trend pattern, 2012 should not be an extreme flood year – in fact, there should be several more years before the next extreme flood loss year. U.S. flood loss in 2012 is projected at approximately $3.53 billion.

Before the federal program was launched in 1968, few private carriers provided flood insurance because of the cost and destructive power of floods. Under the program, homeowners in FEMA flood zones are required to buy policies from insurance companies — about 90 provide it — and the government pays for flood damage with federal funds collected largely from homeowner premiums.

This year’s big losses could drive the program further into the red, or it could underscore the need to continue and possibly expand the program to protect property that does not qualify for coverage today.

Do you have flood insurance? We’d love to hear how you feel about the federally funded flood insurance program. Is it too costly for our government to continue funding, or do you think it’s something our government should offer at whatever the cost? Click the comment link below and tell us what you think.