More than half of all homeowners living in high-risk flood zones lack flood insurance, a study by ValuePenguin revealed.
Only 40% of homeowners in 100-year floodplains as designated by the Federal Emergency Management Agency had flood insurance policies, Insurance Business America reported.
Homeowners in Florida and Louisiana understand flood risks better, which is apparent in the number of policies in those states.
But high-risk flood zones in other areas of the country – places like Cleveland, St. Louis, Boise, Idaho and Minneapolis – show fewer than 2% of the homes were covered by flood insurance policies, Insurance Business America reported.
Part of the reason those homeowners don’t purchase policies may be because so few of them understand how likely flooding is during a 30-year mortgage.
FEMA maps high-risk flooding areas that have a 1% chance of flooding in any year, according to Insurance Business America.
“While that may not sound like a high level of risk, it becomes substantial when multiplied over several decades,” ValuePenguin told Insurance Business America.
Adding to the problems for homeowners is that climate changes and accurate mapping techniques are putting more homes in floodplains.
