Flood risk can be a serious and underappreciated risk even in areas not designated a 100-year flood plain. Recent extreme weather and the likelihood of more extreme weather in the future make flood risks even more significant. Yet many homeowners fail to insure against this risk. Homeowners with high equity (low debt) have a greater reason to insure against flood because the loss will be significant and fall on the homeowner. Private flood insurance is ever more available and can be an important supplement to National Flood Insurance Program coverage, or fully adequate by itself because of the higher limits and broader coverage available.
Robert Klein, PhD, is an emeritus professor of risk management and insurance and fellow with the Center for the Economic Analysis of Risk at Georgia State University, Robinson College of Business.
Harold Weston, JD, CPCU, is clinical associate professor of risk management and insurance at Georgia State University, Robinson College of Business, with secondary appointment in the Georgia State Law School.