Understanding Your Flood Exposure Can Help Mitigate Your Risk
Historically, flood risks have primarily affected those living near rivers or coastal areas. However, in northern states, winter thaws often lead to melting snow that swells rivers beyond their banks in the spring. Many regions along major U.S. rivers experience annual flooding, posing significant challenges for homeowners and business owners.
Deciding whether to purchase flood insurance can be difficult due to high premiums and limited coverage options. We understand these risks and work to help mitigate their impact. The challenge is that standard property insurance policies—both personal and commercial—exclude flood damage as a covered peril. Meanwhile, federal flood insurance programs are often only practical for properties at the highest risk of flooding and likelihood of loss.
Recent Flood Events
Several recent flood events raise concerns for the Federal Emergency Management Agency (FEMA) and the insurance industry. A few examples include:
Midwest Floods (June 2024) - Persistent heavy rainfall along the Missouri River in June 2024 resulted in catastrophic flooding throughout the Midwest. The U.S. Army Corps of Engineers led efforts to manage the crisis, highlighting the challenges of aging infrastructure and the need for updated flood management strategies.
Illinois Floods (July 2024) - A series of intense rainfall events caused severe flooding in Illinois. Rockford experienced flash floods that resulted in one fatality, while a dam near Nashville partially failed, prompting evacuations. Additionally, two individuals lost their lives near Elsah due to the floods.
Key Contributing Factors of Growing Flood Risks
The exposure to flooding has expanded in recent years for a number of reasons. They include:
Climate Change and Extreme Weather Events
Increased Rainfall and Storm Intensity: Climate change is leading to more intense and frequent rainfall events, resulting in flash flooding and riverine flooding.
Sea Level Rise: Rising sea levels are exacerbating coastal flooding, especially during high tides and storm surges. This particularly affects coastal communities along the Gulf Coast, East Coast, and parts of the West Coast.
Hurricane Activity: There is evidence of increased hurricane intensity, leading to more significant storm surges and flooding.
Urbanization and Land Use Changes
Urban Sprawl and Impervious Surfaces: Rapid urbanization and the expansion of impervious surfaces (e.g., roads, parking lots, and buildings) reduce natural water absorption, increasing runoff and urban flooding.
Development in Flood-Prone Areas: Continued development in historically flood-prone areas or newly classified high-risk zones heightens exposure to flooding.
Aging Infrastructure and Flood Management Systems
Outdated Drainage Systems: Many cities have aging drainage and stormwater management systems not designed to manage current rainfall intensities.
Levee and Dam Failures: Some levees and dams are aging or inadequately maintained, increasing the risk of catastrophic flooding if they fail.
Flood Maps
Flood maps are changing due to these factors that have increased the risk of flooding. FEMA has been working to improve flood zone mapping in the United States because it has evolved significantly over the years, primarily driven by advancements in technology, climate change, and an increased understanding of flood risks. Those changes include:
Modernization of Flood Maps
Updated Risk Assessment and Modeling
Redefining Flood Zones
Introducing Risk Rating 2.0
Continuing to Update in the Future
Why It’s Important
So why is this important for individuals and businesses who have to make decisions on how to manage their flood risk potential?
Staying on top of changes is as great a risk as flooding itself. Some recommend having some protection for every home and business from a flood. That may not be necessary, but knowing how the risk has changed is important. In many cases, these new and less frequent events may be insurable today outside the federal flood program (NFIP). It is always best to reach out to a professional insurance agent for availability and advice.
How Do We Stay On Top Of These Changes?
Partnering with a property inspection vendor is essential for accurately assessing risk. A reliable vendor provides a comprehensive report detailing the home’s physical characteristics, overall condition, estimated replacement value, and potential exposures to loss. Beyond this, an effective inspection partner should also supply verifiable hazard data. Key exposures assessed may include flood, wind, hail, tornado, lightning, storm surge, earthquake, wildfire, and fire protection—significant risks to both homes and businesses. Insurers can better define and manage these risks by leveraging the most up-to-date data.
For carriers, agents, and policyholders, there is a solution: Regular, detailed property inspections. Incorporating these assessments into homeowners’ and commercial insurance routines not only helps safeguard individual properties but also provides deeper insight into evolving flood risks and so many other hazards.
