Customers love flood insurance, survey says. So why aren't they buying it?
Roughly 40% of Americans agree flood insurance is a "good idea," but only 17% of respondents said they have it.
A recent national survey from the National Association of Insurance Commissioners (NAIC) aimed to take a pulse of Americans’ views and purchasing behaviors on flood insurance.
It found that while 41% agree or strongly agree that flood insurance is a “good idea,” only 17% of that pool actually purchased it. Even worse, the NAIC says even that number and response may be based on a widely-held misconception about homeowners insurance, as FEMA estimates that only about 3% of homeowners have flood insurance.
The disparity between the 17% who say they have purchased flood insurance and the official number of 3% of actual policyholders reflects the common misconception that homeowners insurance covers flooding, Eric Cioppa, NAIC President and Superintendent of the Maine Bureau of Insurance noted.
The NAIC survey was conducted in May and polled 1,000 American adults. In addition to this conclusion on Americans’ feelings on flood insurance, the survey revealed some staggering information about Millennials (those born between 1981 and 1996).
Who is the most likely flood policy customer?
Millennials have given the insurance world a number of puzzles to work through, but insurers might find some relief in these new numbers from the NAIC.
According to the survey results, Millennials are the most likely purchaser of flood insurance.
The study found Millennials are nearly three times more likely to have purchased flood insurance than Baby Boomers (those born between 1944 and 1964).
They are also more likely than their Gen X (those born between 1965 and 1980) counterparts to purchase flood insurance at 25% vs. 16% policy uptake. Thirdly, Millennials are more likely to agree or strongly agree that purchasing a flood policy is a good idea, as 57% of Millennial respondents said compared to 41% for Gen X and 24% for Baby Boomers.
Full details and methodology of the NAIC survey can be found on their website.
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