Program Manager at Aon Edge
The cost of flooding can go well beyond property damage. The impact to individuals, businesses, and infrastructure can be financially and emotionally devastating. Read on to get the full picture.
The Cost of Flooding
What is the cost of flooding? A straightforward question with a complex answer. When dissecting this question, the first, and arguably most impactful consideration, is whether flood insurance was in place at the time of the loss.
No flood insurance!? The property owner is likely on the hook for any and all monetary damages, out of pocket. For many, this is a financially devastating blow with rippling consequences. While homeowners in this scenario may be left in financial ruin and/or without a home, there are a host of downstream impacts that are often overlooked when thinking about the true cost of flooding.
Allow me to paint you a picture: After large flooding events, families are put through considerable emotional pains and often left dealing with mental anguish well after the waters recede. Learning is disrupted as children are oftentimes unable to attend school, whether remotely or on location, as internet connections are impacted, electronics are rendered inoperable, and/or schools are forced to shut down for repair. Communities are often left in shambles as small business are crippled and/or are forced to shut down while employees tend to their homelives. As you can imagine, the side effects are both wide and deep.
While flood insurance doesn’t solve all the aforementioned “costs,” it can help. Families can rebuild their homes and their lives more quickly, regaining both financial and emotional stability, in turn easing the process by which the very fabric of many communities is mended. Small businesses too, are able to reopen their doors with expedience as business interruption subsides and employees are able to rejoin the work force in far less time.
Too often, as insurance professionals, we’re put to the task of quoting a risk and simply providing a dollar amount in response to the typical property owner’s question “what does flood insurance cost?” It is time to reframe the narrative by answering the flood insurance cost question differently, “What is the cost of flooding if you DON’T have flood insurance!?”
This article is provided for general informational purposes only and is not intended to provide individualized advice.