One third of homeowners mistakenly believe homeowners insurance covers flooding
HONOLULU – In recognition of National Insurance Awareness Day on June 28, First Insurance Company of Hawaii (FICOH) is encouraging homeowners to educate themselves on their flood risk.
A Forbes Advisor survey found that 36 percent of homeowners think a typical homeowners insurance policy covers damage from flood water. This is a potentially costly misconception. Neither hurricane nor homeowners insurance covers water damage caused by tidal surges, overflowing bodies of water, or flash floods. Hawaii residents must purchase flood insurance separately to get coverage for water damage that often comes with hurricanes and major storms.
The National Flood Insurance Program, NFIP for short, is a federal program that provides flood insurance to individuals and businesses. Lenders require flood insurance in high-risk flood zones. However, Hawaii homeowners can forego continued flood coverage once their mortgage is paid off. Likewise, homeowners with paid off mortgages can opt out of homeowners and hurricane insurance.
“When coverage is optional, people might think they don’t need it,” said Jeff Grimmer, FICOH Vice President. “But every homeowner in Hawaii should have homeowners and hurricane insurance. Homeowners should also educate themselves on their flood risk given the costly and catastrophic damage flooding can cause.”
An inch of water is all it takes to cause $25,000 of damage to a home, according to FEMA, and the costs of labor and materials are rising.
While there are many NFIP policies in force in Hawaii, there are still opportunities to increase participation in the program to improve homeowner and community resilience:
A flood insurance policy from the NFIP normally carries a 30-day waiting period before it becomes active. If you wait until right before a major storm, it may already be too late.
FICOH is Hawaii’s largest writer of Flood insurance through the NFIP. To inquire about flood insurance through the NFIP or private market, contact your independent agent or find an independent agent here.
About First Insurance Company of Hawaii
Founded in 1911, First Insurance Company of Hawaii, Ltd. is the oldest and largest property and casualty insurer domiciled in Hawaii, with assets of $699.1 million, liabilities of $430.4 million, and policyholders’ surplus of $268.7 million as of December 31, 2022.
First Insurance, a member of the Tokio Marine North America (TMNA) group of companies, enjoys an “A+” rating from A.M. Best Co. Proud of its broadly experienced, service-oriented staff, First Insurance employs more than 250 insurance professionals and distributes its products through 26 independent general agencies. First Insurance was awarded the American Heart Association’s Workplace Health Gold Achievement for 2022. In 2023, First Insurance was named one of Hawaii’s Best Places to Work in the "large company" category by Hawaii Business magazine.
First Insurance supports many local organizations through monetary donations made at the corporate level, by its associates and the First Insurance Foundation. Its charitable giving focuses on four areas: 1) family, social services and health care; 2) education and career development; 3) environment and sustainability; and 4) civic, culture and the arts.
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