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Key Takeaways:
- Relying on FEMA’s maps doesn’t help assess the risk of flooding for a specific property.
- Alert your clients to resources that can provide up-to-date information on flood risks.
- The idea of “it won’t happen to me” is never a valid risk management strategy.
Just as financial advisers caution investors against naive reliance on the past, we cannot solely depend on history to manage the risk of flooding today. The peril of floods has and always will be complex and constantly changing. From urban flooding of land far from any designated flood plain to wildfires in drier climates that set the stage for mudslides and floods, the question of when and where a flood is most likely to occur is difficult to answer.
But what has become clear is that many people unknowingly face a more elevated flood risk than they did just 10 years ago. Simply relying on Federal Emergency Management Agency flood risk maps—some several decades old—doesn’t adequately equip home buyers and their agents with the current information necessary to assess the risk of flooding for a specific property.
So how can we adapt to better protect everyone at risk while flood models and maps catch up? Your role as a real estate professional can be more influential than you realize. Follow these steps to help ensure you and your client understand the risks.
1. Become a source of information on the hidden risks of flooding and how they impact your community.
As we evolve as a country and as weather patterns change, nearly twice as many properties are susceptible to flood damage than previously thought—meaning agents must look at factors that impact flooding beyond designated flood plains. Take Chicago as an example. This urban area is not associated with storm surges or a coastal risk but faces a very real threat. Chicago ranks as the city with the greatest flood risk to date, with nearly 76,000 at-risk properties not included in FEMA’s flood zones, according to the nonprofit research firm First Street Foundation, which recently released a data tool to help assess the flood risk of a wide swath of properties. Realtor.com® is now displaying flood risk data and flood zone information with listings, which can help clients understand the hidden risks of flooding. Encourage buyer clients to consider multiple information sources before making a decision.
2. Provide facts about the insurance protection gap.
The high economic cost of floods—juxtaposed with a substantially smaller amount of insured loss payments—highlights the magnitude of the flood protection gap in our country. FEMA estimates that fewer than 4% of properties nationwide are insured through the National Flood Insurance Program, which accounts for the vast majority of all flood insurance in the country. Too often, consumers turn to their homeowners’ policies to file flood loss claims, only to learn the policies don’t cover flood--related damage. Providing facts for your clients today helps avoid unpleasant surprises tomorrow.
3. Connect your clients with flood risk professionals.
We must stop thinking about flood risk in binary terms and start thinking about flooding as a risk with multiple facets. Flooding represents the largest catastrophic threat in the U.S., measured both by dollars in damages and the number of events. Unlike other catastrophes, flooding has affected every state in the country significantly in the last 10 years. You can make a difference by connecting clients with flood risk professionals, such as local flood plain managers or home inspectors, who can answer questions and offer options to help manage and mitigate risk. Once your clients have the information they need, recommend they talk with an insurance agent to assess whether flood insurance makes sense for them.
The idea of “it won’t happen to me” is never a valid risk management strategy. Consider the 500-year flood that recently wreaked havoc on communities in Michigan or the widespread inland flooding in Pennsylvania following Hurricane Isaias. Property buyers must act today to be prepared for tomorrow.
