A significant proportion of US consumers are denied home insurance because of their property being in a risk-prone location as per a GlobalData survey. For example, flood cover in Florida has become increasingly scarce. Solutions need to be devised so that customers can find adequate cover amid the worsening of weather events.
According to GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, 19.3% of US home insurance policyholders have been denied coverage in the past, with over half (57.7%) believing that this was linked to the property’s location being in a high-risk area, such as an area prone to flooding. In fact, 61.4% of policyholders cite cover for flood damage as a desirable or very desirable home insurance feature as per further findings from the survey.
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An insurance policy should ideally provide cover for common risks as standard, but this is not always the case. Finding flood cover is becoming a real struggle in high-risk areas, including in certain parts of the US. As climate change worsens the frequency and severity of weather events and natural disasters, insurers are losing appetite to provide cover for certain risks, with many pulling out cover from high-risk zones while prices have mounted. This can make it difficult for customers who need—or want—to be covered against specific risks.
Florida is more likely to flood than any other US state, according to Florida Flood Insurance. As such, not-for-profit government entity Citizens Property Insurance Corporation requires Floridian homeowners to have flood insurance in place to qualify for an insurance policy from Citizens. This mandate became effective on 1 January 2025 and applies to homeowners with property replacement costs of $500,000 or more, with this threshold set to be reduced in a staggered manner. Citizens was set up with the aim to offer home insurance to homeowners unable to find coverage in the private market.
HoneyQuote, an online marketplace allowing users to compare and purchase home insurance for properties in Florida, has expanded its offerings to include flood insurance. This will offer convenience to customers, who will be able to compare their insurance options in one place—removing the need to find and contact individual insurers.
Yet as climate change worsens and severe weather events become increasingly commonplace, more solutions will need to be found to help customers find adequate insurance cover that is reasonably priced. Insurers are bound to continue improving their weather risk models to predict events more accurately. Hopefully, the appetite for providing cover will return once risks are better understood and policies can be priced better.
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By GlobalData
