Many homeowners mistakenly believe that homeowners insurance covers flooding but, not everyone is eligible for FEMA assistance. Eric Cioppa, President of the National Association of Insurance Commissioners is here to tell us more.
First, why should climate risk be important for consumers? Eric explains that climate risk in this sense refers to the fact that the number of storms is increasing, and the severity of those storms is increasing. This means that the chances for loss that consumers are exposed to is increasing as well.
Eric then talks about how most homeowners assume that floods are covered by their homeowner’s insurance. This would not be correct. The worst-case scenario is when people find out they are not covered until after the fact.
It is recommended that people review their coverage with their agents annually. Here in Missouri, there is earthquake and flooding risk, and neither of those are typically covered but they can be added to your insurance policy. You need to know what you are covered for and that your coverage amounts are sufficient enough that it would enable you to rebuild. It is also a good idea to take an inventory of the contents of your house.
There is an app coming from the NAIC that will allow you to take videos and photos of your inventory. This will make it easier when dealing with the insurance company and have all of your information saved in a safe place if you do go through a tragic event.
Eric mentions that it is always important to prepare for any kind of disaster, you want to have a plan in place. This includes having food and water on hand and you need to let people know if you are going to stay where you are during a storm. It is better to plan ahead of time rather than to make it up as you go.
For more information, visit NAIC.org.