Flood Season is Coming, and Insurance Agents Have to Be Ready

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  • With the spring finally here, many parts of the country may be about to get heavy rains and that, in turn, can mean flooding risk rises sharply. But the problems presented by these weather incidents go well beyond the physical damage they can inflict, because they could leave many homeowners across the country with major financial obligations that they might not have planned for. As a consequence, insurance agents may want to start doing a little more to ensure that their clients know the risks of not having flood insurance above and beyond their standard home policies, and some steps they can take to remediate those potential issues.

    Something that many insurance agents probably learned during their time in the field is that people typically don’t know that floods are not covered by standard home insurance, according to a report from the Herkimer Telegram. That could leave them facing thousands of dollars in repair bills if their homes are hit by such weather occurrences, and they may not be prepared to deal with it.

    “It is our experience that policyholders have some general knowledge of their coverage if they purchase their policy from an agent,” said Jolene Casatelli, senior vice president and claims officer for an Upstate New York insurance company. “Agents usually discuss policy coverages with their customers when it is purchased, but policyholders should be encouraged to reach out to the agent each year to review their policy coverages.”

    Getting ready
    The problem for many people is that flood insurance can be pretty costly, tacking several hundred dollars per year – on average – onto their existing insurance bills, the report said. And if they live in areas of particularly high risk, that cost could reach into the thousands. Moreover, those prices are expected to rise in the coming years.

    In addition, if people are not able to buy coverage, or fail to do so for other reasons, at least a month or two prior to when they’re hit by flooding, they probably won’t be covered, the report said. While that may leave many homeowners with little time to prepare, the sooner they begin searching for such coverage, the better off they’re likely to be if they are impacted by such an event.

    The sooner people prepare for floods, the better off they're likely to be.The sooner people prepare for floods, the better off they’re likely to be.

    On the agent side
    If insurance agents can help people to understand what their standard home insurance policies do and do not cover, that may go a long way to both helping them figure out what steps they should take to improve their protection, and also boost their relationships with their agents and insurers. Studies have shown that people who have good lines of communication open with those companies tend to be more satisfied with their coverage overall, even if they have to pay a little bit more for it. As a consequence, agents who can build a strong rapport with their clients will typically have the highest satisfaction ratings and retention rates in the long term.