Insurers have responded to recent natural disasters by raising insurance rates or declining to write policies. NAR supports the development of a federal natural disaster policy that promotes the availability and affordability of property insurance nationwide and provides for pre-disaster mitigation as well as post-disaster assistance.Without federal involvement, affordable property insurance will continue not to be available in many parts of the U.S. to protect against the next mega-catastrophe caused by a hurricane, earthquake, or other Act of God. Without insurance, it is the taxpayer -- not the property owner -- that pays when Congress reacts to the latest disaster by providing millions of dollars in financial disaster assistance to rebuild under-insured properties and communities.
None at this time.
What is the fundamental issue?
Insurers have responded to major natural catastrophes by raising insurance rates, reducing coverage and declining to write new or renewal policies. NAR supports the development of federal disaster public policies that emphasize prevention, preparedness and the proactive reduction of risk but include emergency aid for disaster victims.
I am a real estate professional. What does this mean for my business?
Without adequate insurance, homeowners must turn to the federal government for taxpayer-funded disaster aid for property damage, which is typically limited to a low-interest SBA loan that must be repaid with the mortgage.
NAR supports the development of federal disaster policies that meet the following principles:
- Pre-disaster prevention, preparedness, and the proactive reduction of risk should be emphasized, but post-disaster emergency assistance included;
- Private insurance markets should be promoted in order to assume more disaster risk;
- Premiums should align with property specific risk and avoid any majors surcharges, assessments, or cross subsidies from some property owners to others;
- Higher building codes and ordinances should be encouraged that avoid costly retrofits and property damage;
- Pre-disaster mitigation assistance should be provided to current homeowners; and
- Full transparency, disclosure and mapping is required for better informed risk decisions.
NAR has adopted a multi-bill strategy to advance the national disaster policy debate, including:
- Supporting federal assistance and incentives for more proactive mitigaton of risk; and
- Clarifying insurance coverage under the NFIP where there is wind versus flood damage.
NAR will continue to raise the profile of the issue and support the adoption of forward-looking disaster policies.
NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.
Disaster Insurance Coverage
While the exact coverage will vary from policy-to-policy, the following list should give you a good idea of the types of natural "disasters" that a standard policy covers:
- Fire / Lightning
- Windstorms / Hail
- Freezing of Plumbing / Pipes
- Damage from Weight of Ice
- Volcanic Eruptions (with exceptions)
Source: Disaster Insurance (Money-Zine Blog, Sep. 15, 2019)
Information From NAR
FEMA Extends Grace Period for Flood Insurance Renewals (REALTOR® Magazine, Mar. 30, 2020)
Another Last-Minute Save for Flood Insurance (REALTOR® Magazine, Nov. 22, 2019)
FEMA: We’re Changing How We Assess Flood Risk (REALTOR® Magazine, Nov. 8, 2019)
Owners Likely Need to Budget More for Home Insurance (REALTOR® Magazine, Nov. 7, 2019)
Americans Not Persuaded to Buy Disaster Insurance (REALTOR® Magazine, Oct. 30, 2019)
Window to the Law: Flood Insurance & Disclosures: What You Need to Know Now (National Association of REALTORS®, Sep. 30, 2019)
REALTOR® Tells Congress: Entire Country Needs Flood Insurance (REALTOR® Magazine, Mar. 13, 2019)
Many Owners Lack Sufficient Insurance to Cover Disasters (REALTOR® Magazine, Jul. 20, 2019)
National Flood Insurance Program (National Association of REALTORS®)
Homeowners Insurance (National Association of REALTORS®)
Disaster Insurance Basics
The Risk MAP Program: Information for Real Estate, Lending and Insurance Professionals (FEMA, Apr. 20, 2020)
What is Flood Insurance, and When Do You Need It? (Motley Fool, Feb. 8, 2020)
As the California Wildfires Rage On, What You Need to Know About Disaster Insurance (Market Watch, Oct. 30, 2019)
How to File an Insurance Claim After a Natural Disaster (US News & World Report, Sep. 16, 2019)
Frequently Asked Questions (FAQs) (DisasterAssistance.gov, Apr. 3, 2019)
A Mix of Flood Insurance Reforms (Insurance Journal, Apr. 1, 2019)
Your Insurance Premium is About to Rise Like the Sea Levels (The Outline, Mar. 22, 2019)
The $5 Trillion Global Insurance Industry’s Natural Disaster Problem (CNBC, Mar. 15, 2019)
Settling Insurance Claims After a Disaster (Insurance Information Institute)
What Does Flood Insurance Cover? (HouseLogic)
What You Need to Know About Excess Flood Insurance (HouseLogic)
The Right Disaster Insurance for Your Region (HouseLogic)
Do You Need Flood Insurance?
Prone to Floods or Not, Now is the Time to Buy Insurance (Houston Chronicle, Apr. 10, 2020) E
5 Steps to Protect Your Home (Consumer Reports, Sep. 1, 2019) E
A Stubborn Truth: Debunking the Many Misconceptions Homeowners and Business Owners Have About Flood Insurance (Best’s Review, Apr. 1, 2019) E
FACT SHEET: Should I Buy Flood Insurance? (FEMA, Mar. 12, 2019)
Three Reasons Everyone Should Consider Buying Flood Insurance (Simple Dollar, Jan. 29, 2019)
Should You Keep Your Flood Insurance (Even If It’s Not Required)? (Quicken Loans, Jan. 11, 2019)
Should You Buy Flood Insurance? (HouseLogic)
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Contingency Planning and Disaster Recovery (Kindle, eBook)
How to Insure Your Home (Kindle, eBook)
Leading People Through Disasters (Kindle, eBook)
Books, Videos, Research Reports & More
The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.
The Great Deluge: Hurricane Katrina, New Orleans, and the Mississippi Gulf Coast (New York, NY: Morrow, 2006) HV 636 B75
Before and After Disaster Strikes: Developing an Emergency Procedures Manual (Chicago, IL: Institute of Real Estate Management, 2005) HC 62 In7bd
Be Alert, Be Aware, Have a Plan: The Complete Guide to Protecting Yourself, Your Home,Your Family (Guilford, CT: Globe Pequot Press, 2002) HV 7431 R19
Disasters and Democracy: The Politics of Extreme Natural Events (Washington, DC: Island Press, 1999) HV 555 P53
Disaster Preparedness: Simple Steps for Business (Chicago, IL: Crisp Publications, 1998) HF 5500 F87
Disaster Insurance Protection: Public Policy Lessons (New York, NY: Wiley-Interscience, 1978) HG 9970 K96
Disaster Relief and Rehabilitation in the United States: a Research Assessment (Boulder, CO: 1975) HC 62 C71d
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