Many consumers still significantly underestimate their flood risk, and nearly half have chosen to forego flood coverage because they believe it’s unnecessary or too expensive, according to InsurTech Neptune Flood Insurance’s inaugural Consumer Survey of Flood Awareness.

Only 54 percent of consumers surveyed have flood insurance on their primary residence. For those who didn’t purchase coverage, 45 percent said they don’t believe they’re at risk of flooding, and 14 percent believe it’s too expensive.

The majority of consumers surveyed (63 percent) believe their homes are at low or virtually no risk of flooding—this despite a 2019 Verisk study that found 62 million homes representing over 50 percent of U.S. homes are actually at moderate to extreme risk.

Even more worrisome, half of those surveyed (49 percent) admitted they do not know what flood zone they are in, while 15 percent of consumers in high-risk zones said they would not purchase flood insurance if it were not mandatory.

Consumers also seem confused over which entity provides their flood insurance. Neptune Flood said that many consumers who purchased National Flood Insurance Program (NFIP) policies through a private company agency (called Write Your Own insurers) think they have a private flood policy.

“The survey highlights a significant underestimation of flood risk despite years of climate change-driven extreme flooding throughout the country,” said Jim Albert, chairman and founder of Neptune Flood, in a statement. “The recurring tragedy of uninsured homeowners suffering permanent losses from flood events will take a concerted effort from both the government and the insurance industry to solve the large flood insurance coverage gap.”

The survey was designed and conducted by the University of South Florida Institute for Data Analytics and Visualization. Utilizing Qualtrics to construct the questionnaire, Amazon MTurk as the survey tool and IBM SPSS analytics for evaluation of the results, the survey comprises qualified responses from 1,019 respondents across 36 U.S. states.

Source: Neptune Flood Insurance