Washington state is facing ongoing heavy rain and flooding caused by a powerful atmospheric river and winter storm. As the weather takes its toll, insurance experts are warning homeowners and agents about the risks of lacking flood coverage.
Trevor Burgess, CEO of Neptune Flood Insurance, says many agents make a big mistake by not offering flood insurance along with regular property coverage. Standard homeowners insurance usually doesn’t cover flood damage, so if agents don’t suggest a separate flood policy, they could be at risk of errors and omissions claims. Burgess urges agents to bring up flood insurance every time they sell property policies to avoid surprises and disputes later on.
The issue goes beyond just the highest-risk areas marked on FEMA flood maps. In fact, about 77% of single-family homes outside those designated flood zones still don’t have flood insurance, even if they face real danger. Many homeowners don’t realize they need to buy a separate policy to be protected. Burgess wants agents to educate their clients about this so fewer people are caught off guard.
Washington Insurance Commissioner Patty Kuderer has stepped in with an emergency order that helps policyholders by giving grace periods for late premium payments and extending the notice time for policy nonrenewal from 45 to 120 days. Neptune holds close to 10% of the flood policies in Washington and expects only a handful of claims from the current event.
Flood insurance coverage is still rare in Washington, with only around 1% of households having it. Burgess says this event will serve as a harsh wake-up call for those who thought their homes were protected.
Burgess also warns against relying too much on FEMA flood maps when deciding who needs coverage. The government admits these maps aren’t always accurate. Recent flooding in Washington and Texas shows that homes outside mapped flood zones can still suffer serious damage. Hurricanes cause many flood losses, but flooding can happen well away from the coast.
Neptune highlights that outdated maps can cause underinsurance, mislead mortgage lenders, and encourage risky building in areas with hidden flood risks. Between 2019 and 2023, over 211,000 homes were built in places considered high risk by Neptune but not identified by FEMA.
Looking ahead, Neptune hopes to grow its flood insurance base in Washington while keeping a balanced spread across other states like California, Ohio, and New Hampshire. Burgess believes a bigger, more balanced pool of policies will help reduce risk and make flood insurance a more stable, investible product.
This recent event and the ongoing discussion about flood coverage underline the need for better awareness and protection as climate-driven weather patterns continue to challenge traditional understanding of flood risks. Homeowners and agents alike should keep flood insurance top of mind to avoid costly surprises.