Flood Coverage Gaps

Flood is the most underinsured major peril in the United States, and the protection gap has real human and economic consequences after every major event.

The combination of NFIP limitations, consumer confusion about what homeowners policies cover, and the actuarial challenges of writing flood in private markets has left a massive portion of flood exposure uninsured. Events like the inland flooding that followed recent hurricane seasons make the consequences of that gap impossible to ignore.

The private flood market has grown meaningfully over the last several years, driven by improved flood modeling, more granular elevation and topographic data, and regulatory changes that allow private market alternatives to NFIP. But penetration is still low relative to the exposure base.

Closing the flood protection gap is partly a product and pricing challenge, but it is equally a consumer education and distribution challenge. People who do not believe they are in a flood zone do not buy flood coverage, even when modeling suggests their actual risk is non-trivial. Bridging that perception gap is where the distribution and communication work matters most.