Though the risk of flooding is undeniable, a survey by Chubb of brokers with middle-market commercial clients revealed just 16% of them say more than half their clients buy flood insurance.
Furthermore, 65% of the more than 330 brokers surveyed said they believe less than half of clients need flood insurance even though the peril has drastically increased in frequency and severity to become the most common and costliest natural disaster. About 90% of U.S. natural disasters involve flooding.
A standard commercial property insurance policy excludes flood coverage but more than half of brokers said that clients do not purchase separate flood insurance. Brokers estimate that 85% of clients think they already have the coverage with a standard policy, the Chubb survey found. Nearly half of brokers (45%) say their clients do not even request a quote for flood insurance coverage.
“With climate change and changes in topography, flood risk has become much more severe and widespread,” said Derek Talbott, president of North American Property & Specialty at Chubb, in the report. “Rising seas are worsening hurricane storm surges. Unprecedented, intense rainfall is becoming commonplace. At the same time, land that was once porous is now paved over. Sewer systems and infrastructure weren’t built for the inundations we are seeing today. For a commercial enterprise, going without flood coverage leaves a fundamental exposure uninsured.”
Photo: Flooding debris in downtown Montpelier, Vt. (AP Photo/Charles Krupa)
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