The unfortunate truth is flooding can happen anywhere.
The challenge for property owners, whether the property is a home or a business, is assessing the risk of a flood loss and whether flood insurance is the best option to minimize it.
Flooding is not just a coastal problem
Russ Dubisky, executive director of the S.C. Insurance Association in Columbia, says coastal flooding events tend to get more attention because they often result in the total loss of homes and businesses due to storm surges.
But, while Upstate residents are extremely unlikely to see their homes washed off their foundations due to flood waters, Dubisky said torrential rains can strike anywhere and cause flooding damage on properties that may be nowhere near a stream or river.
“There are different types of flooding and different types of flooding risks,” Dubisky says.
Kevin Allen with BrightwayAllen Insurance in Greenville said quite often, homeowners fail to consider the risk posed by a home’s basement. By its very nature, a basement is either entirely or primarily underground and thus susceptible to flooding during storms like the remnants of tropical storm Zeta that passed over the Upstate in fall 2020.
According to storm data compiled by NOAA, the Upstate saw $600,000 in damage caused by the remnants of Zeta, with greater Greenville suffering $150,000 in property losses. Allen adds that while insurance of any type is something you hope you never need, having adequate coverage is a matter of financial risk management.
“That’s what we try to drive home at every opportunity,” Allen says. “If you had that loss today, could you pay for that?”
Risk Rating 2.0
Amid the backdrop of natural disasters occurring with increasing frequency and severity, the Federal Emergency Management Administration’s (FEMA) Risk Rating 2.0 guidelines for flood insurance pricing aim to better reflect the true risk of property losses due to flooding.
According to FEMA, flooding is the most common type of property damage resulting from natural disasters, and flooding losses have occurred in 99% of counties across the U.S. since 1996.
According to Allen, the new FEMA guidelines are designed to more fairly reflect the risk across flood policies under the National Flood Insurance Program (NFIP).
Allen says before the changes, it was often the case that property owners with low risk were paying higher premiums than property owners at high risk and who may have had previous flood damage claims.
“Floods can happen anywhere,” he says. “Floods can happen and they do happen more often than we think away from the coast.”
Allen adds that the new FEMA guidelines are designed to be more equitable and the methodology behind them takes in a range of considerations to more accurately peg a property’s flood risk. Factors include whether a property is built on a slab or over a crawl space, its proximity to a water source and the topography.
Businesses may face higher risks
While a flooding loss could be a substantial financial blow for a homeowner, it could be ruinous for a business owner, according to Tyler Woodall of the Win Agency in Anderson.
Between the expense of damage to a business structure and the potential loss of inventory and/or production assets, flooding in a business could be catastrophic.
Woodall adds that with many businesses surrounded by huge parking lots and concrete surfaces, runoff from a torrential rain event could cause a tremendous property loss.
He says that an uncovered loss from flooding could also impact a company’s business interruption coverage, meaning that revenue lost due to a closure after flooding damage might not be covered.
Dubisky said there is a significant difference between flood insurance coverage and federal financial assistance that might be made available following a natural disaster.
“Federal assistance is not insurance and can take a long time and is more limited,” Dubisky says.
Woodall says that for both homeowners and business owners, calculating the risks of a flood loss versus the expense of monthly flood insurance premiums is important to consider and varies depending on the type of property involved.
Dubisky adds that having a conversation with your insurance agent about your flood loss risks is well worth pursuing. Property owners can also find more information from FEMA by visiting fema.gov/flood-insurance.
Flood insurance rate changes in South Carolina
Risk Rating 2.0 premium changes in the Palmetto State
- 25.5% of properties will see a rate decrease
- 66% of properties will see an increase to monthly premiums of $0-10
- 6% of properties will see an increase to monthly premiums of $10-20
- 2.5% of properties will see an increase to monthly premiums of more than $20
Flooding fast facts
- According to FEMA, just one inch of flooding in a home can cause $25,000 in damage
- Most homeowners insurance policies do not cover flood damage
- Many communities in the upstate participate in the National Flood Insurance Program (NFIP) Community Rating Program, including Greenville County and the City of Greenville. Because of this, city residents can save 15% on flood insurance and residents in the county can save 10%
- Flooding is the most common natural disaster to cause property damage
- According to storm data compiled by NOAA, the Upstate saw $600,000 in damage caused by the remnants of tropical storm Zeta in Fall 2020, with greater Greenville suffering $150,000 in property losses
- Information on flooding and flood maps are maintained by the city of Greenville and can be found at greenvillesc.gov/350/Floodplain-Management. Similar information is available for Greenville County at greenvillecounty.org/floodplainAdministration.