MINNEAPOLIS— According to FEMA, just one inch of flood water can cost homeowners $25,000 in damage. But because parts of Minnesota are underwater, most don’t have the insurance to cover the high costs of the high water.
Of the state’s 2 million households, just over 6,700 have policies through the National Flood Insurance Program, administered by FEMA — the leading provider of flood insurance in the U.S. — according to a spokesperson for the Minnesota Department of Commerce. This represents a decline of 35% in the number of policyholders compared to three years ago.
Another 800 people have private insurance.
Aaron Cocking, president and CEO of the Insurance Federation of Minnesota, says people are often shocked to learn that their homeowners insurance does not cover flooding.
“As we look at the devastation we are seeing across the state now, this is a wake-up call for all of us,” he said.
Last year, the Commerce Department said in a news release that Minnesota ranks last in the nation in flood insurance adoption, with less than 1% of homes having coverage; Louisiana ranked first at 25%.
But floods can have a major impact on communities. On average, the agency says, 40% of National Flood Insurance Program claims happen outside high-risk areas. Three years ago, the average claim payment for flood insurance was more than $44,000, while the premium was $912.
Cocking notes that while the premium may seem high on top of other expensive insurance bills, it is a worthwhile investment in the long run. State experts say Minnesota has experienced more damaging rains due to climate change.
NFIP plans allow homeowners to choose the extent of their coverage, but it maxes out at $250,000 for structural damage and $100,000 for personal property. The policy is not effective until 30 days after purchase, with some exceptions.
Click here for a list of providers in Minnesota.
