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High-Risk Homes Lack Flood Insurance

floodingHomeowners who live in a 100-year floodplain have a 26% chance of their property being flooded at some point during the course of 30 years, the length of a typical mortgage, according to ValuePenguin. However, only a minority of properties located in a designated 100-year floodplain are insured against flooding. 

Just 40% of homes located in “high-risk flood zones” in the 100 largest cities across the United States have flood insurance, according to ValuePenguin. 

In seven cities, less than 2% of homes in high-risk areas have flood insurance. Among those is Boise Idaho, where only one property reportedly has flood insurance while well over 8,000 homes are located in high-risk zones. 

In Riverside, California; Detroit; and St. Louis just 0.9% of properties in 100-year floodplains have flood insurance. 

The remaining cities with flood coverage ratios lower than 2% are Cleveland, Ohio (1.1%); Minneapolis (1.5%); and Youngstown, Ohio (1.8%). 

The flood coverage ratio in 31 of the 100 cities observed was lower than 5%. 

In six of the 100 cities, the flood coverage ratio was actually higher than 100%, meaning not only are most homes within the 100-year floodplain covered by flood insurance, but also many homes surrounding the floodplain also have flood insurance. 

The lowest rates of flood insurance occurred in places that haven’t experienced major flood damage in the past several years, such as Boise, and Detroit. 

Those cities with the highest instances of flood insurance were typicaly cities that have experienced major flooding event in recent history. 

“The recent memory of severe flood events likely prompted homeowners who live outside the 100-year floodplain to purchase flood insurance as well,” wrote Chris Moon, Product Manager for ValuePenguin on the company’s website. 

New Orleans had the highest rate of flood insurance coverage at more than 2,000%. It was followed by Colorado Springs, Colorado, where the coverage ratio is 870%. 

Four other large metros had flood insurance coverage ratios higher than 100%, including Provo, Utah; Sacramento, California; El Paso, Texas; and Honolulu. 

However, whether a city has had a recent flooding or not, “every location in the U.S. has some level of exposure to flood risk,” Moon said, and homes located in FEMA-designated 100-year floodplains are at risk. 

A home in a 100-year floodplain has a 1% risk of flooding each year, which equates to a 26% risk over the course of 30 years. 

“Where disasters are concerned, 2020 is destined to go down in history as the year of the coronavirus—but that doesn’t make the threat of seasonal weather events any less urgent,” Moon said. 

About Author: Krista F. Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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